Govt may hike ceiling on DEPB credit
Government is thinking of increasing the ceiling on Duty Entitlement Pass Book credit available to key segments.
By TNN |
NEW DELHI: In a bid to provide relief to exporters hit by rupee appreciation, the government is thinking of increasing the ceiling on Duty Entitlement Pass Book (DEPB) credit available to key segments. This facility is over and above the hike in duty drawback and DEPB rates announced by the government recently to bail out exporters suffering due to 14% appreciation of the local currency against the dollar since last August.
“We are taking a look at the value caps on DEPB and will be doing something about it... whether the value caps need to be enhanced or done away with,” director general of foreign trade RS Gujral said on Wednesday. The DGFT would take a final view in the next four to five days, he said, addressing a meeting organised by the Confederation of Indian Industry (CII).
The credit available through the DEPB scheme can be used to import raw materials. However, there are value ceilings on several products in order to ensure that unscrupulous elements do not exploit the export-promotion facility.
In the relief package for exporters announced earlier this month, DEPB rates were raised by 2-3%. In case of textiles (including handloom), readymade garments, leather products, handicrafts, engineering products, processed agricultural products, marine products, sports goods and toys, the rate has been increased by 3%. For other items, rates were increased by 2%.
Mr Gujral urged CII to come up with specific suggestions to improve the DEPB scheme. He assured exporters that the changes would be made WTO-compatible.
The DGFT also urged exporters to learn to live with exchange rate fluctuations. “Exporters must cut cost to become competitive and learn to hedge against the exchange rate fluctuation risks,” Mr Gujral said.
Additional DGFT Shyam Agarwal said uncertainties arising due to sudden withdrawal of certain schemes cannot be avoided altogether since it is dependent on external policy environment.
“We are taking a look at the value caps on DEPB and will be doing something about it... whether the value caps need to be enhanced or done away with,” director general of foreign trade RS Gujral said on Wednesday. The DGFT would take a final view in the next four to five days, he said, addressing a meeting organised by the Confederation of Indian Industry (CII).
The credit available through the DEPB scheme can be used to import raw materials. However, there are value ceilings on several products in order to ensure that unscrupulous elements do not exploit the export-promotion facility.
In the relief package for exporters announced earlier this month, DEPB rates were raised by 2-3%. In case of textiles (including handloom), readymade garments, leather products, handicrafts, engineering products, processed agricultural products, marine products, sports goods and toys, the rate has been increased by 3%. For other items, rates were increased by 2%.
Mr Gujral urged CII to come up with specific suggestions to improve the DEPB scheme. He assured exporters that the changes would be made WTO-compatible.
The DGFT also urged exporters to learn to live with exchange rate fluctuations. “Exporters must cut cost to become competitive and learn to hedge against the exchange rate fluctuation risks,” Mr Gujral said.
Additional DGFT Shyam Agarwal said uncertainties arising due to sudden withdrawal of certain schemes cannot be avoided altogether since it is dependent on external policy environment.
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