Auto MNCs welcome Exim policy

new delhi: the new exim policy may bring auto mncs some news to cheer about. according to senior dgft sources, the government “will consider several requests that have been received� to make the new epcg benefits retrospective. under the new rules, the export commitment period under the epcg scheme has been extended from eight years to 12 years. if the benefit does become retrospective, it would help auto oems like daewoo and hyundai which have large epcg commitments. hyundai motor india, for instance, has a $1.1-billion epcg commitment starting 2001 and an extension of the export period would “ease the pressure a little,� says a senior company source. in 2000, the company had submitted a deemed export proposal to offset its epcg obligations by selling models available in india to nris in convertible currency. as for daewoo motor india, the beleaguered korean chaebol has epcg commitments worth $3 billion with the obligation period extending from 1997 to 2005. the company extended its epcg commitment period from 2001 to 2002 last year. about 15 per cent of its total was due by 2001. maruti and ford also have epcg obligations while telco’s commitment includes both commercial vehicles as well as car exports. auto oems have been facing trouble honouring their epcg commitments given the sluggishness of both the domestic market and the export scenario. the extension of the export obligation period is significant since the government can impose pecuniary penalties only on epcg commitments since it involves a financial benefit.