Promptly plunged into the confabulations that have gripped the capital. But there was no ambiguity in Ramaiahs business-as-usual responses to s queries. An optimistic Ramaiah
Q. What has been the feedback you have received from exporters on the new Export-Import policy? What in your opinion are the most significant features of the policy?
A. The feedback received from exporters on the new Exim Policy is quite encouraging. Exporters have appreciated the simplification made in the procedures for claiming the benefit under the policy. The most significant feature of the policy is transparency, predictability and automaticity.
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The basic aim of the policy is to consolidate the gains made so far on the trade front and to provide a proactive policy environment during the Ninth Plan period for a quantum increase in export performance through increased realisation of the trade potential of the country in a globally competitive environment. We want to ensure that our exporters concentrate on the manufacturing and marketing of their products globally and operate in a hassle-free environment.
Q. It has been alleged by certain exporters that the new duty entitlement scheme is even more complicated than the old passbook scheme? On what basis will the credits be given under the scheme?
A. The Duty Entitlement Pass Book (DEPB) scheme is very simple to operate, administer and understand. The rate of credit will be known to the exporters in advance, which will help them in their costing for exports. The credits will be available uniformly throughout the country and no subjectivity is involved in grant of credit. The credit will be fixed in consultation with the department of revenue. The idea is to refund the duty incidence on the inputs required in the export product without going into the hassles of subjectivity involved in determination of international price.
Q. Do you think the new policy will help boost the special import licence (SIL) premium? How much is the premium at present and what can we expect it to go up to in the next 3-4 weeks ?
A. SIL is a mechanism for shifting items from the negative list to the free list. The items that have been shifted from the negative list to SIL are in accordance with the general policy of liberalisation where quantitative restrictions will be phased out over a period of time.
Q. What is the reason for changing the minimum criteria for export houses, star trading houses etc? Will this not be against the interests of the smaller exporters?
A. While the government is thinking of achieving an export target of $75 billion by the turn of the century, the Federation of Indian Exporters Organisation has envisaged a target of $100 billion by the turn of the century. The classified trade houses contribute significantly to Indias exports. If they fail to achieve impressive growth in export performance, the country will not be able to achieve the desired level of exports by the turn of the century.
Moreover, the earlier threshold limit was fixed when Indias exports were in the range of $17-18 billion. Indias exports are presently around $35 billion. Therefore, the revised threshold level is neither unrealistic nor arbitrary. The new threshold limit will not affect the small-scale sector as the export from this sector is given double the weightage. This in turn means that the threshold limit is only 50 per cent of the normal threshold limit for the SSI sector.
Q. Is India still aiming on the 15 X 15 matrix countries or products or has the focused changed ?
A. The matrix of countries and products was designed earlier. It would not be the same for all time to come in entirety. While some products continue to be important, some others have changed in significance. Our focus would, however, continue to be not only on the established markets and products but also on newer products based on trends in world trade and Indias potential for deriving benefits.
Q. The ministry must have some projections or targets for 1997-98 other than the broad target of $75-100 billion by 2002? Can you give some figures on this?
A. On the basis of an observed growth of about 20 per cent per year in exports during the Eighth Plan, exports could be expected to be in the range of over $75 billion. On the basis of cumulative growth observed in the recent past and the target of securing at least 1 per cent share of global exports, the targets could be in the range of $90-100 billion.
As of now, the export target could only be in terms of broad orders of magnitude and it would be realistic to envisage targets in values within a range.
Q. Will the new policy reverse the slowdown witnessed this year in tea, rice, iron-ore, leather and gems and jewellery or will that be reversed by exogenous factors?
A. The slowdown in the growth rate in certain commodities in the export basket is due to exogenous factors such as the international situation as well as domestic factors, which are sector-specific.
While the Exim Policy per se cannot be an answer to changes in the international market place, the policy framework as well as the procedures attempt to provide an environment to encourage domestic production for the export sector and for suitable diversification of markets.
In respect of the items mentioned, the government has already examined the matter. Exports of tea felt the impact of difficulties in trade with Russia and CIS countries for which remedial action has been initiated through bilateral initiatives, trading and banking arrangements etc.
In respect of rice exports, the export performance is dependent on the decisions of the government to permit exports having regard to the domestic availability of food grains.
Even here, basmati rice which has higher export realisation has not been hampered. In respect of iron-ore, by its very nature, it is a primary commodity and the volume and value of its exports would depend on international demand, supporting infrastructure etc.
The leather sectors performance was affected owing to the delay in the adjusting process to comply with environmental standards by the tanneries. Regarding gems and jewellery, the export performance during the last year was influenced by the prevalent international arrangements in the supply of raw material. The Exim Policy provides an enabling environment to facilitate exports. There are other supportive measures also required to step up exports. The Government is conscious of the need to tackle and solve sectoral problems besides the policy support required under the Exim Policy.
While the remedy would primarily lie with the change to favourable conditions in the international environment, changes in the policy and procedures could provide an endogenous impetus to help the export sector to diversify into related activities/markets and work towards achieving accelerated export growth which is beneficial to both industry and economy.
Q. You mentioned in your speech that the anti-dumping mechanism is to be strengthened. What concrete steps have been taken in this direction?
A. The government is continuously monitoring the progress of filing of anti-dumping petitions by the industry before the designated authority prescribed under the Customs Tariff Act 1975 and will strengthen the anti-dumping set up as and when required. As for expediting investigations, various time limits have been laid down in the statutory rules which conform to the WTO agreement and these limits are adhered to by the designated authority.
I might add that as far as the strengthening of anti-dumping mechanism is concerned, additional staff is being deployed and other necessary steps are being taken to ensure that investigations are done in a time bound manner and all anti-dumping cases are settled expeditiously.
The interview was sought by Business Standard immediately after the Exim policy was announced, but was granted only yesterday.
The basic aim of the policy is to consolidate the gains made so far on the trade front and to provide a proactive policy environment during the ninth plan period.
The earlier threshold limit was fixed when exports were in the range of $17-18 bn. With exports now at $35 bn, the new threshold level is not unrealistic nor arbitary.