SHOURIE APPROVES NEW EXPORT PROMOTION COUNCIL
Date : 24 Dec 2002
Location : New Delhi
In a major initiative to ensure hassle-free environment for exports, the Customs will allow export & import consignments to go through on the basis of self-assessment from March 31, 2003 under the Electronic Data Interchange (EDI) system. This was indicated here today at the meeting of the Board of Trade held under the chairmanship of Shri Arun Shourie, Minister for Commerce & Industry, Disinvestment and the North East, by the Chairman of the Central Board of Excise & Customs (CBEC), Shri M.K. Zutshi. Shri Rajiv Pratap Rudy, Minister of State for Commerce & Industry, along with Shri Dipak Chatterjee, Commerce Secretary, Shri S. B. Mohapatra, Secretary (Textiles) and Shri Lalit Mansingh, Director General of Foreign Trade were present on the occasion. Members of the Board also welcomed the announcement made by Shri Shourie regarding simultaneous issuance of notifications along with the Exim Policy.
Referring to negotiations on TRIPS & Public Health which had reached a stalemate in the WTO, Shri Shourie reiterated India’s position that there should be no dilution of the Doha mandate in TRIPS & Public Health in terms of access to medicines by way of coverage, definition of disease etc., and informed that India, China, Brazil and the African group were completely together on this issue. He also indicated that India’s concerns on Implementation Issues and Special & Differential (S&D) treatment were well reflected in the reports prepared by the chairmen of various committees which had been set up to go into the issues following the Sydney mini-ministerial.
During the interactive session, the Minister had a useful exchange of views with trade and industry in the run up to the forthcoming Exim Policy and assured that various suggestions received would be given due consideration in formulating the Policy.
Shri A. C. Muthaiah, President, FICCI, expressed confidence that the export target of US $ 80 billion by 2007 could be achieved provided certain critical measures were taken for accelerating exports. This, he said, could be achieved by focussing on agri exports, strengthening the manufacturing industry, providing world class infrastructure in Special Economic Zones (SEZs) and thrust on services. He advocated the Look East Policy through free-trade agreement with the ASEAN as well as greater cooperation with APEC and aggressive pursuit of national interest in the WTO. In agriculture, he suggested that India should go for minimum tariff reduction and seek entitlement for special safeguards which are presently available only to the developed countries, besides phase out of all export subsidies and trade distorting subsidies. He also said that the US proposals for complete elimination of tariffs and the zero-for-zero tariff formula propagated by the developed countries were unacceptable "as we do not have a level playing field". Shri Ashok Soota, President, CII, flagged issues relating to export growth, market access, export credit and regional issues. Pointing out that achieving 1% share of world trade by 2007 would require US $ 7 to 8 billion exports annually, for the next five years, he suggested that target markets should be identified and market and product-wise action plans should be drawn up. He also expressed concern over rising protectionism in the developed countries targeting the IT sector, especially in the US and the EU. While assuring the members that the government was fully alive to such issues, the Minister underlined the need for government and industry to work together on such issues. He also indicated that our concerns over the recent New Jersey Bill preventing contracts from being outsourced to India had been conveyed to the US authorities.
Shri Ramu S Deora, Shri Satish Dhanda, Shri Navratan Samadria and Shri D.S. Brar, Chairman, Ranbaxy India Ltd., expressed concern over the high cost of export credit which eroded the competitiveness of Indian exports and suggested that policies announced by RBI regarding interest rate on export credit should be implemented by all banks. They emphasised the need to continue with duty-neutralisation schemes which were only refund of duties paid and not an incentive. Shri Brar said that credit issues and input costs should be tackled on a war-footing. "Otherwise, with a strong rupee, imports will become cheaper and exports will become expensive". A suggestion made by both CII and Shri Brar was that foreign trade data should reflect services and invisible exports such as IT/software, along with physical exports. Presently, the data contains only merchandise exports and excludes export of services which is handled by RBI. Shri Deora suggested that deemed exports should be treated at par with physical exports.
Shri Rafeeque Ahmed, President, FIEO, sought transparency in fixing drawback rates and urged the government to restore income-tax exemption under Section 80 HHC as a measure to augment manufacturing capacity to be able to compete with countries like China. Shri Samadria suggested that domestic tariff area (DTA) sales by units using 100% indigenous inputs should be given the same tax benefits as EOUs and SEZs.
Shri Nalin Kohli, Vice Chairman, Electronic & Computer Software Export Promotion Council, highlighted the opportunities in hardware for relocation of units in India and sought special emphasis on services as a major area for exports. While welcoming the concept of SEZs, he suggested that since such zones were mainly for larger units, SEZs could be set up in many cities for smaller companies also. Along with other members he was critical of taxing exports and suggested that the word incentive be dropped from the Exim Policy as the various schemes were in the nature of duty-neutralisation and could not be termed as incentives. Shri A.J. Tharakan underlined the potential of seafood exports and the need to attract more foreign investments in the sector. Ms. Neeraj Ghei spoke of the tremendous potential of tourism as a foreign exchange earner, while highlighting the various "self-inflicted" tariff and non-tariff barriers which were hindering the growth of tourism in India. She urged the government to treat tourism as an export industry with the same benefits as were being extended to exports.
Shri T. N. Ninan and Shri Sanjaya Baru called for new perspectives in the context of the rising foreign exchange reserves and for a paradigm shift in focus to trade and not just exports. The Minister responded by stating that the importance of exports could not be underestimated merely because of high foreign exchange reserves. "Increasing exports is one of the important feel good factors in the economy….exports are an important engine for lifting the domestic industry", he said.