Turnover Criterion For Trading Houses Doubled

The new Export-Import (Exim) policy for 1997-2002 has doubled the export turnover criterion for exporters to be awarded the status of export, trading, star and superstar houses.

The criterion pegged at a minimum average annual export turnover (calculated on a free-on-board basis) in the preceding three years has been hiked from Rs 10 crore to Rs 20 crore for export houses, from Rs 50 crore to Rs 100 crore for trading houses, from Rs 250 crore to Rs 500 crore for star trading houses and from Rs 750 crore to Rs 1,500 crore in the case of superstar trading houses.

 

If an exporter opts for the criterion to be based on the previous years performance, the minimum turnover required is Rs 30 crore for an export house, Rs 150 crore for a trading house, Rs 750 crore for a star trading houses and Rs 2,250 crore for a superstar trading house.

Until last year, the criteria was fixed at Rs 15 crore, Rs 75 crore, Rs 300 crore and Rs 1,000 crore respectively.

Commerce minister B B Ramaiah said on Monday that the eligibility criterion had been revised in order to achieve the export target set for the turn of the century and increase the countrys share in the global market.

The government has set an export target of $75-100 billion (Rs 270,000-360,000 crore) by 2002. The increase in the eligibility criterion for the trading houses which account for 60-70 per cent of the countrys exports has been carried out to achieve this ambitious target.

The trading houses are eligible for a number of incentives like special import licences, depending on the category they are classified under.

Apart from the revision of the eligibility criterion, the only other significant change effected in the Exim policy is the announcement that every state and Union territory will be allowed to nominate a corporation as an export house even if the firm does not meet the new eligibility criteria.

The benefits accruing to the parent company from exports made by subsidiary companies have not been changed.

Double weightage has also been retained for products manufactured by units in the small scale industries, tiny and cottage sectors. Double weightage of exports envisages a doubling of actual exports while classifying exporters as trading houses.

Similarly, double weightage on the f.o.b value of exports and triple weightage on the net foreign exchange the value of licences deducted from the f.o.b value earned by exports from the handlooms and handicraft sector, hand-knotted and silk carpets has been retained.

However, the government has also made exports of fruits, vegetables, floriculture and horticulture produce; products manufactured in the North-Eastern states; and exports to select countries eligible for the double weightage benefit.