JOIN USCentre rolls out slew of sops in new trade policy
It has extended income tax holiday for one more year up to 2010-11.
Outlining trade policy for the coming five years ending 2014, the FTP, will continue all the ongoing incentive schemes for exporters, has also sought to provide special incentives on exports to untapped markets in Latin America and Africa in the face of country’s export getting severe jolt due to shrinkage of demand in traditional markets. The FTP has identified 26 new markets for market that would be eligible for incentives. These include 16 in Latin America and 10 in Asia and Oceania.
“We have taken a conscious view to expand and diversify our export markets, especially in the emerging markets of Africa, Latin America, Oceania and CIS countries,” Commerce Minister Anand Sharma said. The government would offset disadvantages that exporters might face in these new markets, he added.
Product diversification
The FTP while seeking product diversification to expand country’s export basket listed a large number of products from various sectors that would be eligible for benefits under Focus Product Scheme (FPS). These include engineering products, plastics, green technology products like wind mills, wind turbines and electric operated vehicles and certain electronic items. Significantly, the policy has vastly expanded the list of products that would be eligible benefits under the Market Linked Focus Product Scheme (MLFPS), including pharmaceuticals, synthetic textile fabrics, textile made-ups, knitted and crocheted fabrics, value added plastic goods, and glass products. Benefits to these products will be provided if exports are made to 13 identified markets comprising Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand, and selected African countries.
It also seeks to extend MLFPS benefits for export to additional new markets for certain products like auto components, motor cars, bicycle and its parts and apparels. Incidentally, the FTP while seeking to address the credit requirements of the exporters, pledged to meet the Dollar credit needs of exporters in ‘a timely manner’ to boost export. For this purpose the government constituted a committee comprising Finance Secretary, Commerce Secretary and the Indian Banking Association Chairman.
In view of exporters being hit hard by the global recession the government in a bid to impart stability to the FTP regime decided to extend duty refund scheme (Duty Entitlement Passbook Scheme — DEPB) from 2009 end to December 31, 2010. Further, in a bid to encourage exporters to go for technological up-gradation to boost their global competitiveness the FTP allowed duty free import of capital goods for certain sectors up to March 31, 2011.
Duty drawback
The policy has sought to provide a special thrust to the employment-oriented sectors which have witnessed job losses in the wake of recession, especially in the fields of textiles, leather and handicrafts, while seeking to help gems and jewellery sector — one of the worst hit segments due to global recession — by allowing duty drawback on exports.
To enable support to Indian industry and exporters especially those in the small and medium category, in availing their rights through trade remedy instruments under the World Trade Organisation framework, the FTP proposes to set up a Directorate of Trade Remedy Measures.
Further, Sharma has set a target of $200 billion worth exports for the next fiscal, pointing out that the aim of the policy, which would be reviewed after two years, would be to ‘arrest and reverse declining trend of exports’ the FTP would be reviewed after two years.
DH News Service