Ministry likely to upgrade exports of import intensive commodities

The ministry of commerce may come up with measures for enhancing exports primarily for commodities which are import intensive for raw material like gold, gems and jewellery exports.

It has further suggested to ministry of finance to link gold import with amount of gold items export. According to proposal an exporter of gold items will be allowed to import 3-4 times the amount of its export.

"It will act as incentive for the exporter as additional amount left after its use for export items, it can be sold to domestic market", said an official source close to the development. Besides, the license for gold export and import can be also made transferable and saleable to other, they added.

Explaining this, they said, if one entity with the license is finding it difficult to procure orders and hence not importing , it could sell the license to some other entity who has many orders. In this way, the license can be used fruitfully besides compensating the original licensee as it can help him earn some money. At the same, the new exporter will not have go through less administrative rigours for securing a license.

According to officials, this scheme should be made applicable for the second window of gold import. Currently there are two windows - one for import of gold for domestic consumption which attracts eight per cent import duty. The second for import of gold for exporters and export purposes which does not have any duty .

However this proposal is not finding favour with either ministry of finance or Reserve Bank of India (RBI) as according to them it will amount to quantitative restrictions. Further it will be difficult to monitor the entire scheme. However officials added, consultations are going on before any decision is taken.

Meanwhile, agencies importing gold for exporters have been advised to give priority to exporters for supply of gold after it is imported. Further different credit schemes like suppliers credit, buyers credit etc. will be further relaxed for easy financing the exporters.