Pmo Presses For Reliefs To Halt Export Slowdown

The package will, among other things, include important changes in the existing export schemes like Export Promotion Capital Goods (EPCG), a revamped export credit scheme, advance licensing and deemed exports.

It would also include steps to alleviate the infrastructure bottlenecks.

Confirming this, PMO sources said the prime minister was of the view that a policy response on such a grave matter need not wait for the completion of the assembly elections in Uttar Pradesh.

Commerce minister B B Ramaiah told Business Standard it was possible to reverse this trend, adding that inter-ministerial discussions will be held to identify the problem items and countries, and the corrective steps to be taken.

 

"There is an overall slackness in world markets," he said, adding that the situation was not out of hand.

These issues were also raised at the meeting of the core group of the board of trade executive wing yesterday, where the commerce ministry officials agreed to consider some proposals put up by exporters.

The ministry is also considering permitting manufacturer exporters with a three-year track record to just give a legal undertaking and not bank guarantees.

Certain other issues raised by exporters were clarified and the procedures eased. For instance, the export obligation for exporters who import fewer capital goods than what are permitted under licence will be reduced during the export obligation period.

Further, under the deemed exports scheme it was clarified that if a licence is for Rs 10 crore and the exporter buys machinery locally for Rs 2 crore then the export obligation will be on the latter amount. Earlier, the export obligation was levied on the upper limit.

It was suggested at the meeting that imports as per norms and quantities should be permitted against production of a shipping bill.

It was also suggested that under the EPCG scheme if the exporter meets 75 per cent of his export obligation within two years, he should be given a remission of 25 per cent. Under the advance licencing scheme also a similar remission was proposed if the rest of the export obligation was met within six months. Officials said that these suggestions would be favourably considered.

Exporters also took the opportunity to suggest scrapping of the 15-per cent EPCG scheme and allowing the zero-duty EPCG to all exporters and not just to projects above Rs 20 crore.