Prioritise completing unfinished agenda in FTP: FICCI
FICCI has said priority should be given to complete the "unfinished agenda" of reducing transaction cost and neutralising incidence of duties to boost exports.
By PTI |
NEW DELHI: As the government is ready to present the final annual supplement to the Foreign Trade Policy this week, FICCI has said priority should be given to complete the "unfinished agenda" of reducing transaction cost and neutralising incidence of duties to boost exports.
"In view of the current global slowdown and adverse impact of rupee appreciation on Indian exports last year, there is need for more dynamic export promotion measures and schemes in the forthcoming annual review of Foreign Trade Policy 2004-09," industry body FICCI said.
Priority should be given to bring down transaction cost, which is the highest as compared to other competing countries, it said. Simplifying procedures and bringing down transaction cost was part of the FTP announced in 2004.
Citing a World Bank study, FICCI said transaction cost of exporting a container from India was 844 dollars while it was 390 dollars in China, 432 dollars in Malaysia and 515 dollars in Pakistan.
"Another unfinished agenda of the Policy for 2008-09 is the neutralisation of incidence of levies and duties on inputs used in exports," FICCI said.
The supplement to the FTP should also provide a roadmap for a comprehensive duty neutralisation scheme, replacing the DEPB, which would neutralise import and other duties. This new scheme should work on the principle that duties and levies are not exported, it said.
In the absence of a suitable replacement, DEPB should continue till 2010 when GST will be introduced, it said.
In separate suggestions to the DGFT on SEZs and EOUs, FICCI said all services provided to SEZ developer and its units outside their premises for authorised operations should be exempt from service tax.
Currently, SEZ rules exempt service tax only on those services that are provided to units inside the zone. As a result, many key services like port, banking and finance that are provided to units outside the SEZs even for authorized operations are not exempted from tax.
EOUs should be exempt from CST as is the case with SEZs. FICCI also urged the government to allow duty free import of capital goods, infrastructure and construction materials to help reduce the initial set-up cost.
The government should also consider having zero custom duty under the EPCG scheme to encourage exporters to utilize its benefits. The duty has come down to 7.5 per cent on various capital goods.
India's share in world merchandise exports in 2006 was a mere one per cent and till the first half of 2007, the share remained unchanged.
FICCI further said cashew and tobacco, important agricultural commodities, should be entitled for benefits under the Vishesh Krishi and Gram Udyog Yojana that will enable the industry to face the severe competition in global market and result in higher exports.
"In view of the current global slowdown and adverse impact of rupee appreciation on Indian exports last year, there is need for more dynamic export promotion measures and schemes in the forthcoming annual review of Foreign Trade Policy 2004-09," industry body FICCI said.
Priority should be given to bring down transaction cost, which is the highest as compared to other competing countries, it said. Simplifying procedures and bringing down transaction cost was part of the FTP announced in 2004.
Citing a World Bank study, FICCI said transaction cost of exporting a container from India was 844 dollars while it was 390 dollars in China, 432 dollars in Malaysia and 515 dollars in Pakistan.
"Another unfinished agenda of the Policy for 2008-09 is the neutralisation of incidence of levies and duties on inputs used in exports," FICCI said.
The supplement to the FTP should also provide a roadmap for a comprehensive duty neutralisation scheme, replacing the DEPB, which would neutralise import and other duties. This new scheme should work on the principle that duties and levies are not exported, it said.
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In the absence of a suitable replacement, DEPB should continue till 2010 when GST will be introduced, it said.
In separate suggestions to the DGFT on SEZs and EOUs, FICCI said all services provided to SEZ developer and its units outside their premises for authorised operations should be exempt from service tax.
Currently, SEZ rules exempt service tax only on those services that are provided to units inside the zone. As a result, many key services like port, banking and finance that are provided to units outside the SEZs even for authorized operations are not exempted from tax.
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On EOUs, FICCI said there is a need to change the current practice of first charging service tax and later giving them CENVAT credit to reduce transaction time and cost of exports. EOUs should be exempt from CST as is the case with SEZs. FICCI also urged the government to allow duty free import of capital goods, infrastructure and construction materials to help reduce the initial set-up cost.
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"This would make the products manufactured and exported from EOUs more cost effective and competitive," it said. The government should also consider having zero custom duty under the EPCG scheme to encourage exporters to utilize its benefits. The duty has come down to 7.5 per cent on various capital goods.
India's share in world merchandise exports in 2006 was a mere one per cent and till the first half of 2007, the share remained unchanged.
FICCI further said cashew and tobacco, important agricultural commodities, should be entitled for benefits under the Vishesh Krishi and Gram Udyog Yojana that will enable the industry to face the severe competition in global market and result in higher exports.
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