SUSTAINING AND ACCELERATING EXPORT GROWTH THE HIGHEST PRIORITY
Date : 19 Jan 2001
Location : New Delhi
Shri Murasoli Maran, Union Minister of Commerce & Industry, has stressed that export growth rate must not only be sustained but also accelerated and urged the exporting community to strive for improving competitiveness so as to effective face the challenges ahead. "The emphasis has now shifted from export apathy or export pessimism to export-led growth", Shri Maran said while addressing the Open House on Exim Policy, organised by the Federation of Indian Export Organisation (FIEO) here today. Shri Maran also referred to the dual challenges that could arise from the reported slowing down of the US economy which had been one of India's most important export destinations and the impending phase-out of the remaining quantitative restrictions (QRs) which would pose both new challenges and new opportunities. While inviting suggestions from the participants on the forthcoming Exim Policy to make Indian exports more competitive including initiatives to reduce transaction costs and ensure access to inputs required for exports, Shri Maran indicated that the government was contemplating a comprehensive look at export promotion with a medium term perspective which would be exporter-friendly as well as WTO compatible. Shri Omar Abdullah, Minister of State for Commerce & Industry; Shri Prabir Sengupta, Commerce Secretary; Shri N.L. Lakhanpal, Director General of Foreign Trade, senior officials of the Customs and Shri K.K. Jain, President, FIEO were also present on the occasion.
While congratulating the exporters for their commendable performance during the current year, the Minister underlined that despite the positive growth as also the fact that India's share of world trade had increased to 0.7 per cent from 0.46 per cent in the mid-80s, the country's exports in respect of both the commodity basket and destinations continued to remain rather concentrated. Hence, there was an urgent need to diversify by identifying sectors with high growth potential, Shri Maran said and assured that all the suggestions made by exporters at today's interaction would be given due consideration while formulating the Exim Policy. He also assured that the issue of exemption of export profits from income tax under Section 80-HHC would be suitably addressed. In his opening remarks, Shri Abdullah emphasised the need to sustain the double-digit export growth over the coming years, even while noting that the growth of 20 per cent achieved so far was well above the target set for the current year. Shri Sengupta reiterated that the government would do everything possible to facilitate exports within the parameters of the overall macro-economic environment. In response to issues raised by several exporters relating to duty-drawback and DEPB, the representative of the Department of Revenue clarified that there was no income tax on duty drawback as per the notification of 1991 and assured that necessary instructions would be issued to expedite pending cases of duty drawback payment and DEPB registration. Responding to a suggestion for promotion of exports from the North East, Shri Sengupta explained that a Rs.5 crore package of promotion schemes had been sanctioned to boost exports from the North Eastern region
Shri Jain summarised the exporters' problems as high transaction costs, which he said were result of inadequate infrastructure, expensive export credit, procedural delays and the lack of coordination between policy makers and implementers. He also urged the Minister to make efforts for restoring the tax exemption given to export profit under Section 80-HHC. On behalf of the exporting community, Shri Jain assured the Minister that the Federation would do its best to raise India's share in world trade to more than 1 per cent. Among the other suggestions given by participants to increase exports included grant of EOU status to those exporting 100 per cent of their production; further simplification of procedures; addressing issues arising out of closure of polluting units in the capital which had adversely affected the garment exporters in the small scale sector; threats of imposition of labour and environmental standards by the importing countries; designation of Amritsar as a nominated port for purposes of DEPB so as to facilitate basmati exports and continuation of DEPB beyond 2002 or working out an alternate arrangement. Some of the exporters also suggested that the benefits being given to the units in SEZs should be extended to all the exporters and highlighted the need to ensure proper enforcement of notifications issued by DGFT. A representative of the hotel industry suggested that some of the goods being imported by them for the purpose of furnishing and other things should be categorised as capital goods and be eligible for benefits under the EPCG scheme. Shri Ranjit Lal, DG/FIEO delivered the vote of thanks.