M A I N   N E W S

Quantitative restrictions on exports go
New Exim policy unveiled; focus on agriculture, cottage industry
Gaurav Choudhury
Tribune News Service

New Delhi, March 31
The Union Commerce Minister, Mr Murasoli Maran, today unveiled a five year Exim Policy (2002-07) incorporating comprehensive sops to the sagging exports sector. The policy announcements, which seek to convert the terms-of-trade in favour of the rural economy in the medium term, has dismantled all quantitative restrictions (QRs) on exports, continues with the Duty Entitlement Pass Book Scheme (DEPB) and offers transport subsidy for agro products.

“It is estimated that every 1 per cent switch in terms of trade in favour of agriculture will result in diversion of about Rs 8,500 crore additionally in favour of agriculture from the non-agriculture sector,” Mr Maran said while making the policy announcements at a packed news conference here.

The policy removed major restrictions for agri-exports which were perceived to be as major deterrents for the growth of the sector. Export restrictions such as registration and packaging requirement are being removed from today on butter, wheat and wheat products, coarse grains, groundnut oil and cashew exports to Russia under the Rupee Debt Repayment Scheme.

“Quantitative and packaging restrictions on non-basmati rice, wheat and its products, butter, pulses, grain and flour of barley, maize, bajra, ragi and jowar had already been removed earlier this month.

Further, transport assistance is proposed to be made available for the export of fresh and processed fruits, vegetables, floriculture, poultry, dairy products and products of wheat and rice. In addition, the policy has also proposed to work out “suitable transport assistance for the export of accumulated stocks of rice and wheat from the Food Corporation of India (FCI) to facilitate their liquidation”.

In an attempt to provide enhanced international market access to Indian farmers, 20 Agri Export Zones ( including one each in Punjab and Jammu and Kashmir) have been sanctioned so far.

A series of measures have also been announced to bring about procedural simplifications to reduce transaction costs. A new eight digit commodity classification for imports is being adopted from today and same day licensing is being introduced in all regional offices. Further, direct negotiation of export documents to be permitted in banks to help exporters to save bank charges.

The policy has also identified the cottage and handicrafts sector as a major thrust area and announced several initiatives to facilitate growth in the sector.

An amount of Rs 5 crore has been earmarked for promoting the cottage sector exports coming under the KVIC and units in the handicrafts sector can now access funds from Market Access Initiative (MAI) scheme for normally permissible activities, including development of website for virtual exhibitions. The overall allocation under the MAI has been increased to Rs 42 crore in 2002-03 from Rs 14.50 crore in the previous year.

Besides, these units shall be entitled to the benefits of export house status on achieving lower average export performance of Rs 5 crore as against Rs 15 crore for others and shall also be entitled to duty free imports of specified items.

Special Economic Zones (SEZs), developed on the lines of the Chinese export success story, receives a further boost, with special income tax concessions being proposed for units in SEZs. Thirteen new SEZs, located in various parts of the country, have already been given approval.

Significantly, for the first time in India, overseas banking units (OBUs) will be permitted to be set up within SEZs. These OBUs will be exempted from CRR and SLR requirements and units within the SEZ will have access to funds at international rates of interest. “This is a very significant decision in making SEZs internationally competitive”, Mr Maran said.

“Our SEZs now will be second to none, in this part of the world regarding incentives offered”, the minister added.

In an attempt to strengthen the involvement of states in the export promotion activities, a new scheme Assistance to States for Infrastructural Development for Exports (ASIDE) has been announced and a sum of Rs 330 crore has been approved for 2002-03.

The Electronic Hardware Technology Park (EHTP) scheme is being modified to enable the sector to face zero duty regime under the ITA (Information Technology Agreement)-1. Among other things, these units, henceforth, shall be entitled to net foreign exchange as percentage of exports (NFEP) positive in five years. Further, for the efficient and faster project implementation, free import of equipment and other goods used abroad for more than one year has been allowed.

The Commerce Minister also announced measures for the development of industrial cluster towns and such areas, (including Panipat and Ludhiana), will receive priority for assistance for identified critical infrastructure gaps from the scheme on Central Assistance to states.

On gems and jewellery, customs duty on import of rough diamonds is being reduced to zero per cent and the licensing regime for rough diamond is being abolished.

For diversification of markets, the Focus Latin America Market programme, launched last year, has been extended by one more year and new programme Focus Africa is being launched from today. Besides, a Focus CIS programme is proposed to be launched from next year.

Highlights

New Delhi, March 31
The following are the highlights of the Exim policy announced today.

• All QRs on exports removed
• DEPB, EPCG and other schemes to continue
• IT concessions to SEZ units
• Permission to set up overseas banking units in SEZs
• Benefits for export-oriented industrial clusters
• Incentive package for the hardware sector
• Procedural simplification to reduce transaction costs
• New eight digit commodity classification adopted
• New programmes for Africa and and CIS countries
• Quantum increase in assistance to states
• Allocation increased for market access initiative scheme
• Many sector specific benefits