Ahead of the unveiling of the new foreign direct investment (FDI) policy, industry lobby Assocham has urged the government to remove excise and local levies on exports and set an achievable shipment target for the next fiscal.
“India is likely to achieve export proceeds of less than $185 billion in current fiscal against the targeted levels of $200 billion. Therefore, it would be prudent to set realistic targets for export proceeds for next fiscal,” Assocham President Swati Piramal said in a statement.
Commerce and Industry Minister Anand Sharma will unveil the new Foreign Direct Investment (FDI) policy on Wednesday, which would rationalise and simplify the policy regarding FDI. It will seek to raise the cap for automatic approvals from $133.3 million (Rs. 600 crore) to $266.6 million (Rs. 1,200 crore).
At present, FDI policies come out in the form of ‘Press Notes.’ The new policy would subsume as many as 177 Press Notes.
In a representation sent to the minister, Piramal pointed out that only three key areas in India’s exports have so far shown some sign of recovery and these include gems and jewellery, apparel, textiles and other value added articles in engineering areas.
“In the forthcoming foreign trade policy, sufficient emphasis need to be exerted for export subsidization so that Indian products find space in overseas markets such as Africa, Latin America, Nepal, Sri Lanka, Bhutan, Bangladesh and Pakistan,” she said.
“Export proceeds should not be subjected to Minimum Alternate Tax (MAT) as it amounts to various bureaucratic hassles and encourages unnecessary government intervention as also prevent smooth flow of exports,” she added.
Assocham also called for an increase in duty drawback and the central bank’s intervention so that commercial banks and other financial institutions extend necessary export credit to exports at cheaper interest rates.