Exporters advised to enhance competitiveness
Refund of taxes will be speeded upExporters asked to look for new markets
NEW DELHI: Union Commerce and Industry Minister Kamal Nath on Wednesday assured exporters that the Government would speed up refund of certain taxes and reduce the premium on insurance cover on exports so that traders could get some relief from the fast appreciating rupee. He promised to raise their other key demands with Union Finance Minister P. Chidambaram.
ECGC to reduce rates
"All arrears of terminal excise duty and Central Sales Tax reimbursement would be cleared by June 30. The Export Credit Guarantee Corporation of India (ECGC) will reduce its premia rates by up to 10 per cent,'' Mr. Kamal Nath said after meeting the members of the Federation of Indian Export Organisations (FIEO) and all export promotion councils (EPCs).
ECGC, a public sector entity under the Commerce Ministry, provides risk cover to exports.
Mr. Kamal Nath also assured exporters that his Ministry would recommend to the Finance Ministry to enhance the rates of duty neutralisation schemes like the Duty Entitlement Passbook Scheme (DEPB) and Duty Drawback by five per cent, besides asking for a reduction in the interest rate on pre-shipment and post-shipment credit to exporters to six per cent.
At present, the rate of interest charged is in the range of 9 to 11 pert cent. Mr. Kamal Nath agreed to exporters' demand of paying interest on Exchange Earners Foreign Currency (EEFC) accounts.
At present, EEFC Account deposited is stated as current account and interest on it discontinued since 2000.
However, Mr. Kamal Nath asked the exporting community to look at the issue of the rising rupee as an opportunity to enhance its competitiveness and to look at new markets.
"Rupee rise is no doubt a problem, but it is also an opportunity for all of you to move towards greater efficiency, reducing costs and enhancing competitiveness. Whether the rupee rises or not, new competition in global markets is a fact of life which has to be addressed. You must also look at new markets,'' he added.
Appreciating Mr. Kamal Nath for sharing concerns of exporters, FIEO President G. K. Gupta said all these initiatives would help in neutralising the impact of the rising rupee on exports to a large extend.
"We have reached a stage where we have stopped entering into new contracts. This will be reflected in a sharp dip in exports from July onwards. Many small exporters of traditional items in price sensitive segments have already closed their factories. The loss of exports will have serious implications on employment opportunities,'' Mr. Gupta added.