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Foreign Trade Policy to boost farm, services sector exports New Delhi, August 31 The Foreign Trade Policy (2004-09), unveiled by the Commerce and Industry Minister here, contains a host of new packages and schemes pertaining to agriculture, services and bio-technology export besides some rationalisation measures to reduce transaction costs. A special package for agriculture—Vishesh Krishi Upaj Yojana (VKUY) — will be introduced to boost the export of flowers, fruits, vegetables, minor forest produce and their value-added products. The export of these products would qualify for duty-free credit entitlement equal to 5 per cent of the value of export. Capital goods imported under the export promotion capital goods (EPCG) route would be duty free, Commerce and Industry Minister Kamal Nath said while unveiling the policy. The services sector has also been identified as one of the thrust areas. A new scheme called “Served from India” is being launched, under which individual service providers who earn foreign exchange of at least Rs 10 lakh would be eligible for a duty credit entitlement of 10 per cent of total foreign exchange earned by them. In the case of stand-alone restaurants, the entitlement would be 20 per cent, whereas in the case of hotels, it would be 5 per cent. In addition, an exclusive Services Export Promotion Council (SEPC) would be set up in order to map opportunities in key services in major markets and develop strategic market access programmes, including brand building in coordination with players in specific sectors and recognised nodal bodies of the services industry. Mr Nath said the government would promote the establishment of common facility centres for use by home-based service providers, particularly in areas such as engineering and architectural design, multi-media operations and software developers in state and district-level towns. The Commerce Minister said a new scheme to establish free trade and warehousing zones (FTWZ) had also been introduced to “make India a global trading hub”. Foreign direct investment (FDI) would be permitted up to 100 per cent in the development and establishment of the zones and their infrastructure facilities. “Each zone would have a minimum outlay of Rs 100 crore and units in the FTWZs would qualify for all other benefits as applicable to the SEZ units,” the minister said. A new scheme called Target Plus has been introduced, under which exporters who achieve a quantum growth in exports would be entitled to duty-free credit based on incremental exports. For incremental growth of over 20 per cent, 25 per cent and 100 per cent, the duty-free credits would be 5 per cent, 10 per cent and 15 per cent respectively. Export-oriented units (EOUs) would be exempted from service tax in proportion to their exported goods and services and they would be permitted to retain 100 per cent of the export earnings in EEFC accounts. The minister also announced a number of rationalisation measures. All exporters with a minimum turnover of Rs 5 core and a “good track record” would be exempted from furnishing a bank guarantee in any of the schemes. The import of second-hand capital goods would be permitted without any age restrictions and the minimum depreciated value for plant and machinery to be relocated to India had been reduced from Rs 50 crore to Rs 25 crore. The minister clarified that the existing duty entitlement passbook scheme (DEPB), which was proposed to be discontinued from April 1 this year, would continue till replaced by a new scheme. “This new scheme will be drawn up in consultation with exporters,” he said. Biotechnology had been identified as another major growth engine and Mr Nath announced that biotechnology parks would be set up, “which would get all facilities of 100 per cent EOUs”. For the handicrafts sector, he announced the establishment of a new Handicraft Special Economic Zone and an increase in the duty-free import of trimmings and embellishments in these sectors to 5 per cent of export value. These would also be exempt from countervailing duty (CVD). The minister said the Board of Trade would be revamped and be “given a clear and dynamic role”. “There would be a process of continuous interaction between the Board of Trade and the government in order to achieve the desired objective”. A new rationalisation scheme of categorisation of status holders as “star export houses” had been introduced, designating them from one star to five star.  |
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