Northeast needs FIEO’s presence,

say government officials

 

Considering the immense export potential of both commodities and services from the Northeast region of the country, all the export facilitating agencies working in the region should go for a Solution Exchange Model by effectively coordinating among themselves. FIEO Secretary General Ms. Tinoo Joshi said this while addressing a Sensitisation Workshop organized by FIEO at Shillong on 18th December 2006. Apart from the senior government officials, representatives of major export facilitating agencies such as ECGC, EXIM BANK, NABARD, RBI, SBI, IFAD, and ITPO joined the meeting along with a number of prominent exporters from the region.

FIEO Secretary General went on to say that considering the preference of today’s consumers, particularly in the advanced countries, we should think of environment friendly products. To ensure this, said Ms. Joshi, appropriate certification mechanism for organic agro and forest products should be evolved.

Mr. Samiran Chatterjee, IAS, Additional Secretary, Government of Meghalaya in his keynote address informed that Meghalaya’s share out of total export from Northeast was approximately 48% but unfortunately the products exported were mostly raw materials and primary products without much value addition. Echoing the demand of the exporters present there, he requested FIEO to set up a branch in the North Eastern Council to step-up exports from the region. Given the potential of export of horticulture and agro products from the area, Mr. Chatterjee said, FIEO may act as a catalyzing agent form boosting their exports. Calling for a collective regional approach to boost export from the region, he further observed that there was a scope for export of value-added products like anthurium, turmeric, pineapple, oranges besides ginger from the region to neighbouring countries.

Mr. Sanjeev Nandwani, ITS, Jt. DGFT, Kolkata while giving details of export incentives under Foreign Trade Policy, advised the participating exporters to make use of EPCG scheme to broad-base their export basket and improve their product profile for securing higher unit price realization. Like Mr. Chatterjee, he also felt that with FIEO’s presence in Northeast would ensure better coordination among export facilitating agencies in the area. Mr. Chatterjee requested Mr. Nandwani to do some export awareness programmes in the region in association with FIEO and other agencies.

Dr M S Haque, Officer-in-Charge, NABARD, Meghalaya Regional Office, who is also a known expert in bamboo plantation, observed that the much publicized ‘tissue culture’ might not be cost effective for bamboo plantation in the area in the prevailing situation. He said "unless we go for massive production and build-up a huge raw material bank at different important locations, no tangible purpose in the field of exports of value added bamboo products will be served." He gave a statistical projection on how bamboo plantation can generate huge employment in rural areas in the Northeast. Raising employment through exports is a thrust area of the current Foreign Trade Policy.
View of a market of agri-products in Shillong

A representative of Assam Regiment Welfare Association (ARWA) under Home Ministry raised the issue of engaging skilled retired army personnel for developing and producing various products in Northeast. ARWA representative said roughly 80,000 workforce was available for a second career in the Northeast who can be deployed for export of commodity and services. Mr. Chatterjee advised ARWA to coordinate with the Director of Industries, FIEO and other agencies to work out an effective plan to hire the services of retired army personnel.

Mr. B B Choudhury, AGM & Branch Manager, ECGC, Kolkata, while detailing out various policies available to secure the risk in the field of exports, observed that exporters particularly in the Northeast ended up in not getting payment even against Letter of Credit for some discrepancies which could be secured through a particular Policy available with ECGC. Exporters present in the meeting expressed their keenness to interact with ECGC.

Mr. S Sonowal, Regional Manager, EXIM Bank, Guwahati in his presentation brought out various schemes available to the exporting community from his bank including meeting the needs of working capital requirement of the exporters and line of credit to different countries to step-up export. Most of the exporters present there felt that EXIM Bank catered to the need of only big exporters and not attended to the financial needs of small and marginal exporters who form the bulk. Dispelling this notion of the participants, Mr. Sonowal requested them to come with feasible proposals and assured that his bank would love to finance them.

Anthurium plantation in Meghalaya

Explaining the Reserve Bank’s role in the field of export, Mr. K P John Kutty, DGM, Foreign Exchange Department, RBI, Guwahati reminded the exporters that repatriation of foreign currency against export should be necessarily brought back within 180 days, unless the extension was sought through authorized dealers. Most of the exporters wanted to know from Mr. Kutty why in a number of cases the issuing banks were not making payments to Indian exporters against Letters of Credit in utter disregard of the provisions of UCP500. They urged that RBI should initiate proper action to check the incidence.

Dr. K Moses Chalai, IAS, Programme Co-ordinator & Development Strategists, NERCRMP-IFAD, Shillong narrated how NERCRMP was revolutionizing the life of rural people in Northeast through natural resource management and forming self-help group to manage it efficiently. He said as of now the project covers 860 villages in Northeast covering 39161 households in the hilly areas of Assam, Manipur and Meghalaya. Dr Moses also said that the presence of FIEO in Northeast can galvanise the growth of export and generation of employment to bring peace and prosperity in the erstwhile less developed region in the Northeast.

 

Check illegal trade, Manipur businessmen urge

FIEO Director General Mr. Ajay Sahai feels that there is a tremendous scope for exporting items such as handloom, wooden & bamboo products, ginger, fruits & vegetables, etc. from Manipur to ASEAN countries, provided the general export infrastructure is improved in the region. On the other hand, businessmen from Manipur believe that issues such as permission to open Letter of Credit in Indian Rupee and permission for trans-shipment of goods from Manipur to neighbouring countries like Myanmar and China are throttling whatever little export prospects they have.

A 15 member business delegation from Manipur raised these concerns in a meeting with FIEO officials on 3rd January 2007 at New Delhi. Besides Mr. Sahai, FIEO officials like Mr. Ashok Kumar, Dy Director General and Mr. Vinod Pal, Joint Director also took part in the meeting which was held at the instance of IIFT.

Visiting delegates also informed that a large volume of goods was being traded illegally in Manipur with the neigbouring countries and there was an urgent need to check this. Mr. Sahai urged the delegates to submit their views on the problems they were facing in exports and their solutions and assured them to raise their concerns with government officials on behalf of FIEO.

 

No tax on services rendered by non-residents abroad: Supreme Court

The Supreme Court of India in its landmark judgment delivered on 4th January 2007 has questioned the rationale of levying income tax on services rendered by non-residents outside the territorial limits of India. The Court categorically ruled that "only such part of income as was attributable to the operations carried out in India would be taxable in India." The Court also observed that the taxation liability in respect of overseas services would not arise in India if the income was generated without any activity of the permanent establishment, even under the DTA.

While welcoming the Supreme Court judgment, FIEO President Mr. Ganesh Kumar Gupta has observed that the judgment could have a direct bearing on service tax levied on turnkey projects carried out by non-residents abroad and foreign agency commission etc.

Federation of Indian Export Organisations
New Delhi, INDIA.