Exim '04 to give agri exports a leg-up

NEW DELHI: Export-Import (Exim) policy ‘04 is expected to provide a stimulus to the export of value-added farm produce, by extending tax benefits, including excise duty exemptions to food processing units. It would boost SMEs with the lowering of the threshold for being a status-holder exporter. Besides, the policy to be unveiled by mid-July would prop existing manufacturing hubs for the largest employment-creating industries as ‘townships of export excellence.’
The government reckons that farmers would realise better prices for their produce, if manufacturers of agricultural products and certain food processing industries are given tax benefits, which would raise their export competitiveness, and create higher demand for farm produce. The commerce department is taking the proposal to the department of revenue, official sources said.
Sources said the threshold for being a status-holder exporter may be lowered to Rs 5 crore in the Exim policy, to make more SMEs eligible for the special package meant for status-holders.
Currently, exporters can hold titles like export house, trading house, star trading house and super star trading house if they post export performances in terms of FOB value in the current licensing year, or in any of the preceding three licensing years at Rs 45 crore, Rs 300 crore, Rs 1,500 crore and Rs 6,000 crore respectively. Besides, a few defined categories of exporters — including the small and tiny sector exporters, units exporting handicrafts etc, units located in the Northeast and exporters to Latin America and CIS/Sub-Saharan Africa can have export house status on achieving exports (fob) of Rs 15 crore in the current year or any of the preceding three years. In the coming policy, this would be lowered to Rs 5 crore.
The status holders are entitled to licences and permits and Customs clearance on a self-declaration basis, fixation of input-output norms on priority within 60 days. They are exempted from negotiation of documents through banks and can retain 100% of the foreign exchange in an EEFC account.
Sources added that for a focused push to export-oriented manufacturing hubs, infrastructure support at the government’s cost is now being accorded to larger hubs like Ludhiana, Panipat and Tirupur, which would be made available to hubs that are smaller in size. These hubs, with an export turnover of less than Rs 1,000 crore would receive funds under the Industrial Infrastructure Upgradation Scheme.
The sectors that would receive special aid in the Exim policy would include handlooms, handicrafts, leather and gems and jewellery sectors, thanks to the huge potential in employment creation, sources said. The Exim policy ‘04, to be part of the five year policy (‘02-07) that is running, is unlikely to digress much from the main objectives of the policy, and schemes that are envisaged for the entire tenure of the policy.