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From the President’s Desk…..
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My Dear Fellow Exporters,
Maintaining double digit growth for the past five years, our exports once again registered a growth of 20 percent during the last fiscal touching US$ 125 billion. This high growth achieved despite appreciation of Indian Rupee by over 12% shows that our export sector has now acquired the resilience to withstand external pressure. And perhaps this gave the necessary confidence to our policy makers for setting an ambitious target of US$ 160 billion for the current fiscal having in mind a growth of 28 percent. With export base widening, this target could be achievable, but if the rupee keeps appreciating further, then it may have some cause for worry. Nevertheless I am sure that the Commerce Ministry would impress upon the Central Bank to do the necessary intervention to offset losses to exporters before the things go out of gear.
The Annual Supplement for 2007-08 to the Foreign Trade Policy announced recently places an emphasis on agriculture exports, and rightly so, as two thirds of our population live on agriculture and no inclusive growth is possible without improving the lot of agriculturalists. Unfortunately, in the context of global trade, our farm products do not get adequate market access due to heavy subsidies doled out by the developed world, Yet, the ensuing abolition of agriculture export subsidies by 2013 and the increasing attention being placed by our farmers to SPS standards do provide us some hope to increase our share of agriculture exports in the coming years.
The facility announced under the policy supplement for duty free import of refrigerated van, cold storage facility, pack houses and containers by status holders would encourage them to enter in the field of agri exports. Expansion of Focus Products scheme to include barley, oats, soyabean, copra etc. and bringing in the value added preparations of agriculture under Vishesh Krishi and Gram Udyog Yojana would also have an additional push on the export of agri commodities.
The announcement of a package for export of high-tech products shows a new thinking. High-tech products cover roughly 50% of the total world’s exports which include telecommunication equipments, computer hardware etc. India has already gained global acclamation for software development and Knowledge Process Outsourcing services. The new package announced in the policy supplement would provide a further boost to exports from electronic hardware sector.
Zero rating of exports has been the stated philosophy of the government. However, at times, new taxes have been imposed without providing their remission for exporters. I am happy that the longstanding demand of the exporters for providing them exemption from taxes on overseas services and services used in India has been met in the policy supplement. Now it is the time for the state governments to follow the suit and provide exemption to exporters from octroi, electricity duty and duty on petrol and diesel used in exports.
With a view to diversifying our export destinations to cover new markets other than US and EU, Focus Area schemes covering LAC, Africa, CIS and ASEAN have been in operation from the last year. I am happy that the new policy supplement seeks to extend benefits under this Scheme to 16 new countries, including ten CIS countries. The onus now lies on the exporters to realize the untapped potential that exists in these countries.
The policy supplement also focuses exports from gems & jewellery sector which have shown some slowdown in recent years. Exports from this sector witnessed a low growth of only 5% in the last fiscal. Duty free access to tools & machinery and incentives for silver jewellery announced under the policy supplement would help the sector regain its pre-eminence in our export basket.
All said and done, the policy supplement disappoints the textile sector which was looking for some relief given its unimpressive growth in the post-MFA period. Textiles exports grew by 7% last year with apparels by only 5%. The policy announcement should have strengthened Technology Upgradation Fund scheme and Apparel Textiles Park programme to boost export from this sector.
Yours sincerely,
Ganesh Kumar Gupta
PRESIDENT
