DGFT promises representation of

Northeast in Taskforce

During an interaction with Northeastern exporters at Guwahati, Director General of Foreign Trade Mr. R S Gujral said that greater EDI connectivity would help reduce transaction cost for exporters in the region. He assured that the representatives of Northeast would be involved in the Task Force. The meeting was organized on 21st April by FIEO in association with Federation of Industry & Commerce of North Eastern Region (FINER), Guwahati.

Earlier, while welcoming the participants, FIEO Director General Mr. Ajay Sahai gave an overview of India’s trade and its progress under successive annual supplements to Foreign Trade Policy. Commenting on the future export scenario of the country, he observed that rupee appreciation and moderate growth in world trade in 2008 were likely to pose tough challenges and suggested exporters to aggressively market their products in Africa, LAC and CIS to counterbalance any probable decline in exports to US, EU and Japan. He also drew the attention of the DGFT towards problems faced by exporters in getting refund of output services and requested that left out services should be expeditiously brought under refund net.

Briefing the DGFT on various constraints faced by exporters in North Eastern states, Mr. Sudip De, Vice President, FINER, said that lack containers in ICD Amingaon was raising the transaction cost for tea exporters in the region. He urged for inclusion of tea in VKGUY Scheme in addition to coffee and requested Mr. Gujral to provide preferential benefits of 12.5% under this scheme to exporters from North East to offset additional costs borne by them.

Mr. R S Gujral, DGFT (3rd from left) addressing the meet. With him are from left, Mr. P Halder, Zonal Jt. DGFT, Kolkata; Mr. Sudip De, Vice President, FINER; Mr. Ajay Sahai, Director General, FIEO; Mr. R C Joshi, Director, (Commerce & Industries), Govt. of Assam; and Mr. Anil Saraf, Director, FINER.

During the interactive session, Mr. Dhiraj Kakoti of Indian Tea Association, Guwahati, apprised Mr. Gujral with various problems faced by tea exporters in the region and requested for higher DEPB benefits. In reply, Mr. Gujral said, though the tea export data shows a small decrease in rupee terms because of appreciation of rupee, in dollar terms it shows an increase of 11% and therefore reliable cost statistics was needed to justify higher percentage of DEPB.

Representatives of A J Exim and Goodluck Coal Exports from Meghalaya referred to their problem in procuring trucks domestically under EPCG Scheme for exporting coal to Bangladesh. On this, Mr. Gujral advised his accompanying officers not to initiate any penal action against these exporters. He, however, told that no benefit under EPCG Scheme could be taken by these exporters in view of the observations of Department of Revenue. Mr. P. Halder, Zonal Jt DGFT, Mr Sanjeev Nandwani, Jt DGFT, Mr Anil Singh, Jt DGFT and Mr Tapan Mazumder, Jt DGFT and DDGFT (Guwhati) accompanied Mr. Gujral in the meeting.

On behalf of FIEO, Mr. Ajay Sahai requested for review of Export Obligation under EPCG Scheme for traditional export sectors like textiles, leather etc. which experienced low growth during last fiscal. Besides, he demanded that imports under all un-utilized EPCG License should be allowed at 3% duty, as now applicable for fresh licenses.

On this, Mr. Gujral assured that relief in maintenance of the average would be given to sectors showing decline of 5% or more and suggested that reliable data should be furnished to his office through FIEO and EPCs. Regarding reduced import duty under old EPCG licenses, he said, if any license was unutilized, then the exporter could surrender it and ask for a fresh EPCG license, for which, he promised that no application fee would be levied.

A view of the participants.

Mr. Tapan Chattopadhyay, Dy Director General, FIEO (ER), while summing up the proceedings, informed that despite huge potential, total export from the region was only about Rs 400 crore, comprising primarily of tea and coal. Responding to DGFT’s suggestion that exporters facing difficulty with ICD Amingaon should go for private ICD, he informed that the private ICD in the area was incurring huge losses due to discriminatory policy of CONCOR.

DGFT responds to exporters’ demands

  • While responding to the demand of protection under Paragraph 1.5 of the Policy, Mr. Gujral observed that Government had received feedback about misuse of this facility compelling its withdrawal to ensure stability in domestic market.

  • On the issue of 5 % duty free entitlement for leather sector, Mr. Gujral assured to examine the relevant provisions of FTP and also assured to take up the matter with customs.

  • Referring to the demand of modifying service tax notification on refund of service tax for output services, Mr. Gujral assured to take up the matter with the Department of Revenue and asked for a separate representation justifying the demand.

  • On refusal of banks to give 2% additional interest subvention for export through canalizing agencies since canalizing agencies are not falling within the definition of SME, Mr. Gujral felt that associate exporters could get the subvention benefit if the product exported by STC fell in the list of 9 sectors and suggested to take up the case with appropriate authority.

  • Mr. Gujral agreed to the demand of higher value cap for DEPB rates in principle but advised the exporters to submit detailed data with his office through FIEO or EPCs.

  • With respect to Accredited Clients Programme (ACP) for faster clearance of import cargo, Mr. Gujral assured that his office would examine the case of covering export promotion schemes under ACP. Meanwhile, he informed that very few status holders had applied for this benefit.

  • A clarification was sought relating to present/correct SION of Serial No E38 of "Food Products" enabling exporters to avail export benefit under rate list Serial no. 22 (d) of product group code 90. Mr. Gujral informed that clarifications had been issued by his Department for all products except ‘maize,’ for which, he assured, it would be done shortly.

  • On the demand of deemed export benefits for certain transactions in leather industry, Mr. Gujral observed that payment in foreign exchange for procurement and selling within India by some big retailing overseas giants could not rank for deemed exports.

  • Regarding request for transferability of duty credit extended to agri-product exports vide P/N No 19 dated 30.7.2007, Mr. Gujral observed that since the very inception of this scheme, it was non-transferable and merchant exporters can avail the benefit for themselves.

  • Mr. Gujral accepted the demand of downward revision in the value addition criteria laid down for calculating DEPB rates if proper data justified lower value addition.

Some sops for exporters in credit policy

Commenting on the RBI’s Annual Policy Statement 2008-09, FIEO President Mr. Ganesh Kumar Gupta said that increase in CRR to 8.25% from May 24, 2008 will suck another Rs. 20,000 crore out of the money market and may adversely affect the growth of industry.

Meanwhile, FIEO President welcomed certain positive features for export sector announced in the Policy. He said: "Increase in repatriation period for export goods from 6 months to 12 months will provide additional marketing tools to Indian exporters particularly in new markets of Africa and Latin America. Writing off claims on outstanding export bills settled by insurance companies (other than ECGC) will lead to competitiveness in the export insurance sector which is need of the hour."

Mr. Gupta also welcomed capitalisation of export proceeds outstanding beyond the prescribed time and called it a step towards full convertibility. The introduction of currency future in the eligible exchanges in consultation with SEBI will extend the facility hitherto available only to exporters to public as well, he added.

 

Federation of Indian Export Organisations
New Delhi, INDIA.