Foreign trade policy announcement: Focus on value-added manufactured exports
Written by Anand   
Monday, 14 April 2008
Policy Addresses Inflation, Rupee Appreciation

New Delhi: The supplement to the Foreign Trade Policy 2008-09 announced today by the Commerce and Industry Minister, Mr Kamal Nath addresses the major issues impacting industry, inflation and rupee appreciation, and at the same time provides sustained focus on export-led economic growth and employment generation, according to Mr Sunil Bharti Mittal, President, Confederation of Indian Industry (CII).

Mr Mittal said that the integrated Foreign Trade Policy for 2004-09 had helped to multiply exports and industry will continue to work with the government to achieve the US$ 200 billion export target set for next year.

Mr Mittal welcomed the decision to cover the IT hardware sector under Special Focus initiative and the decision to include specific items are within High Tech Product Scheme. He said that along with the software exports, India’s hardware exports would get a tremendous boost.

Mr Mittal said “a Telecom EPC was long overdue given the rapid expansion of this sector in the last few years and I am happy that this will pave the way for higher telecom exports from India”. IT/ITES and R&D in Natural Sciences and Engineering have been included as industrial activities under the Industrial Park Scheme. He said that this is important in view of the recent cost pressures experienced in the economy, which has dented exports.

Mr. Mittal was of the view that a slew of measures announced to reduce the transaction cost to exporters was timely as the Indian industry in recent times was competing on wafer-thin margins and this would help in retaining competitiveness. He said that continued thrust on procedural simplification for exports and the proposed announcement of setting up of Joint Task Force (JTF) is a visionary move and reflect the seriousness of India’s export-led growth as a long term strategy.

Mr. Sanjay Budhia, Chairman CII Trade Committee welcomed the decision to extend the DEPB scheme till May 2009. He said that customs duty payable under the EPCG scheme has been reduced from 5% to 3% and, the announcement of interest at 6% per annum to be paid to exporters in case refund is not made within one month of the due date addresses one of the long standing issue of the exporters. These measures would especially help the small manufacturers in controlling costs and retain their competitiveness in the global markets.

Additional duty credit scrip of 2.5% over and above the normal benefit available under VKGUY for export of certain vegetables, fruits and flowers would have a multiplier effect on economic growth in the farm sector, Mr. Budhia said.

Mr. Budhia noted that increase in the coverage of the Focus Market and the Focus Market schemes by including 10 more countries and more high export intensity products are steps in the right direction of diversifying India’s export basket and export destinations.

He further added that the growth momentum of the Indian exports has been given a push by the announcement of specific issues like promotion of value-added manufactured exports, relief measures to sectors affected by Rupee-appreciation and overall recognition of export of technology-intensive products as priority.

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