India is poised to become the hub of Engineering Process
Outsourcing (EPO) with the size of the Indian EPO market expected to touch US $
30 billion annually by year 2015, from the current size of a little over US $ 3
billion. The estimated demand for engineering
process outsourcing to India has grown at 30% to 35% from 2004-06. The global
EPO market is poised to grow to US $ 110 to 140 billion by 2015.
This is indicated in the Strategy Paper on “Growth of
Engineering Process Outsourcing from India” which was released by Shri Kamal
Nath, Union Minister of Commerce & Industry, at the All India Awards
presentation function of the Engineering Export Promotion Council (EEPC) here
today.
The Minister congratulated EEPC for bringing out a
strategy paper on EPO indicating the potential that exists in this emerging
sector and assured that the recommendations of the strategy paper would be
carefully looked into by his Ministry so that the EEPC could play a proactive
role in promoting the EPO sector, besides export of engineering goods.
Shri Rakesh Shah, Chairman, EEPC informed that engineering exports from
India had touched the US $ 26 billion mark in 2006-07 and attributed this
achievement to the outstanding performance of engineering exporters. He also
flagged several issues of concerns to engineering exports.
Responding to some of the issues raised by Shri Shah in his speech, Shri
Kamal Nath mentioned that the Duty Entitlement Pass Book (DEPB) had been
extended till March 2008 and his Ministry was working to develop an
alternative Duty Neutralisation Scheme that would replace the DEPB Scheme,
which would lapse next year. He further pointed out that the Annual
Supplement 2007 to the Foreign Trade Policy had addressed the issue of Service
Tax component that gets factored into exports price.
He urged the engineering exporters to use the Focus Market Scheme to their
utmost advantage in promoting exports of Indian engineering products to these
markets, as the potential growth for India’s engineering exports in focus
markets especially the CIS was huge. In this context, he mentioned that
government had given export thrust to newer markets by expanding the list of
Focus Market Scheme to include 16 new countries including the CIS and stressed
that it was important to concentrate on developing markets in these countries.
While congratulating the engineering exporters (for the year 2005-06), Shri
Kamal Nath assured that all issues raised by Chairman Shri Rakesh Shah would
be looked into and his Ministry would extend all possible help to resolve them.
“In the last three years, our Government has consciously endeavored to
carry out policies designed to make our products globally competitive. Indian
exports, including, engineering exports are likely to face increased non-tariff
barriers, considering that average tariffs for industrial products in all
countries is headed southwards. This process has already begun for engineering
products and is likely to gain greater momentum as India’s share in world
exports increases in the coming years. Thus, the Doha Round of Trade
Negotiations under the auspices of the WTO is a good opportunity for India and
other developing countries to leverage such issues”, the Minister said.
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