Foreign Trade Policy: Highlights

Foreign Trade Policy: HighlightsBS Reporter / New Delhi April 11, 2008DEPB scheme extended to May 2009 Commerce Minister Kamal Nath, in the Foreign Trade Policy 2004-09, today extended the Duty Entitlement Passbook Scheme (DEPB) scheme for exporters to May 2009. The scheme was originally to expire on March 31 this year, but was extended to the new financial year. Last month the Cabinet had withdrawn DEPB benefits on items such as cement, steel, manganese and ferro chrome to improve the supply situation in the domestic market, in order to tackle rising inflation.Income tax benefits on EoUs extended The Foreign Trade Policy also extended by a year the 100% income tax benefit for exports from export-oriented units (EoUs). The benefit, which was to end on March 31 2009, will now end on March 31, 2010. Various export organisation, including the Federation of Indian Export Organisations (FIEO), had been lobbying for an extension. There are more than 2,300 EoU units in the country.Export promotion council for telecom Commerce Minister Kamal Nath announced that a new Export Promotion Council for the telecom sector would be set up to provide institutional support to exports from the sector. Nath also said that the information technology sector would be brought under the special focus initiative this year, with specific items in the sector being made eligible under the High Tech Product Export Promotion Scheme. This would enable funds to be specifically earmarked for this sector under the Market Development Assistance and Market Access Initiatives schemes.More duty credit for toys and sports goods exports Exports of toys and sports goods will be given an additional duty credit of 5%. This is in addition to the 2.5% duty credit allowed on the freight on board price under the focus product scheme for certain notified products. Separate funds for market promotion will also be given under the Market Development Assistance and Market Access Initiatives schemes.Relief to sectors hit by rupee appreciation Interest subvention to sectors hit by appreciation of the rupee, and to small and medium enterprises, has been extended by a year. In the last financial year the government announced a slew of measures to bail out the rupee-hit sectors. Exporters were given a 2% relief on pre-shipment and post-shipment credit in various sectors. The new Foreign Trade Policy also reduces the average export obligation under the Export Promotion Capital Goods (EPCG) scheme in sectors which have seen decline in exports in the last year.Customs duty under EPCG reduced Customs duty payable under the Export Promotion Capital Goods (EPCG) scheme has been reduced to 3% from 5%. Also all exports under the scheme will be eligible for incentives under various promotional schemes. The new trade policy also says that export obligations under the scheme for big trading houses shall be calculated as an average of the last five years

Foreign Trade Policy: Highlights

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