BoT meet tomorrow to focus on more export incentives

Extension of interest subvention for some sectors still not covered under 'scheme' among other subjects to be discussed

Commerce and industry minister Anand Sharma is once again going to convene the Board of Trade meet tomorrow in an effort to boost the country’s merchandise export and identify the sectors where more stimulus is required to be given in the wake of present global scenario.

The Board of Trade (BoT), which is an advisory body on foreign trade to the government, last met in March this year which was quickly followed by the annual review of Foreign Trade Policy (2009-2014) under which exporters were given a slew of incentives in April.

Some of the significant points that are going to be taken up in tomorrow’s meeting are extension of interest subvention for some of the sectors that are still not covered under the scheme, creation of an export development fund for aggressive marketing and increase in credit availability by bringing exports under priority sector among others, officials in commerce department told Business Standard.

Post the meeting tomorrow, the government is expected to announce some incentives for the exporters. The ministries of finance and commerce and industry have been discussing extending interest subvention for leather and some sectors of engineering and textile exports. Both are also mulling the creation of a corpus fund that will support exporters in their marketing efforts.

“We have been pushing for a long time for an export development fund with a certain corpus that will help exporters in marketing their products more aggressively than the competitors in the international markets, because today marketing is the key factor in promoting exports,” Rafeeque Ahmed, a leading Chennai-based leather exporter and president, Federation of Indian Export Organisations (FIEO) said.

FIEO has also recommended for the increased Focus Market Scheme and Market Linked Focus Product Scheme benefits at the rate of 5% for exports to countries or regions with whom India has free trade agreements and other such bilateral arrangements.

According to Sanjay Budhia, an exporter from Kolkata and chairman of CII’s export committee, the government should clarify the issue of Value Added Tax (VAT) imposed by the states on exporters. “There is no clarity on the issue and continues to affect us adversely.”

Budhia also added that the government must look into creating a National Shipping Regulator for smooth transaction of exports. He said, currently, the shipping companies are forming a cartel and charging exporters exorbitantly.

The ministry of commerce and industry under director general of foreign trade (DGFT) has constituted the second task force on reducing transaction cost for exporters. The committee is expected to submit its report by October.

During the first four months of this fiscal, exports reached $98.29 billion, higher than $96.63 billion in the corresponding period of last fiscal. Total exports in 2012-13 stood at $300.60 billion, which was 1.76% lower than $305.96 billion in the previous year.