|
From the President’s Desk…..
|
My Dear Fellow Exporters,
As the announcement of the Exim Policy for the year 2007-08 is being delayed, the expectations of Federation members are moving up. I can’t speculate what fresh incentives the upcoming policy will have for us, but the least I expect is that all the existing schemes in the current Five Year Foreign Trade Policy, including DEPB and DFIA, are allowed to run their course and reviewed, if necessary, only after the end of the Policy in 2009. When we moved over to announcing Five-Year Foreign Trade Policy instead of annual trade policy, the idea was to provide a stable policy framework so that exporters could make long-term export plans. Such stability is important at one hand to ensure that exporters plough back their surplus for up-gradation of their production facilities or capacity building, on the other, it is important for the economy of the nation at large because unstable policies send wrong signals to international market where buyers have ready choices to move to suppliers from other countries. As a matter of fact, even the annual supplements are being amended very frequently during the year which is very unfortunate and if the political leadership expects exporters to maintain high growth, then the least we need is some assurance that whatever incentives we get are not snatched away in the middle.
Under the last annual supplement to the trade policy it was announced that a new scheme would be put in place for the DEPB scheme which is allegedly said to be incompatible with WTO guidelines. For the last one year a Damocles Sword is hanging over exporters as they fear sudden withdrawal of the scheme. Neither has the government been able to come out with a new policy so far nor has it announced the continuation of DEPB scheme. We had some bad experience due to sudden withdrawal of incentives under Target Plus scheme in the past and it compounds our fear that we may receive another jolt in the case of DEPB. The exporters don’t mind switching over to any new scheme which may have greater international legitimacy and all we expect is a reasonable time for preparing ourselves to adapting to a new policy. In today’s competitive scenario exporters have to part with their buyers the incentives they receive under any trade policy and we have no other choice but to maintain our commitments with the buyers to retain them.
Moreover, there are some schemes such as EPCG scheme which are losing their sheen with changing circumstances. The EPCG scheme for import of capital goods at concessional rate of 5% duty was made when the peak rate of custom duty was 30%, but now, with the peak rate of duty having fallen to 10%, the exporters are losing interest to import capital goods under the scheme at a marginal saving in duty against a long term export commitment.
The Federation members expect that the upcoming policy at least retains all the existing schemes and fine-tune a few schemes as per the changing scenario.
Yours sincerely,
Ganesh Kumar Gupta
PRESIDENT
|
Dear Readers, We have been trying to keep you regularly abreast with the activities undertaken by FIEO through FIEO NEWS. Attempts are also made to provide information on policy changes, market trends, and various burning issues of the export industry. We are looking for your valuable inputs on how to make FIEO NEWS more reader-friendly. We also look for your views, observations and experiences about the export-industry for publishing in FIEO NEWS. We especially request you to contribute features on export-related issue, which we shall be more than happy to publish in our bulletin with due acknowledgment.
Editor FIEO NEWS E-mail: fieo@nda.vsnl.net.in |
