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The announcements also outline several measures to support State Governments to create an enabling environment for the exporters; for instance, the assistance to tackle infrastructure gaps and funds assistance based on gross exports and the export growth.
THE Commerce Minister, Mr Murasoli Maran, has outlined a significant, path-breaking set of packages in the Exim Policy to encourage exports and develop markets and the industrial clusters.
However, the industry will also have to keep an eye out for the details in the fine print, which is likely to emerge over the next two weeks, particularly with the Finance Ministry expected to come out with more announcements, according to Mr R.K. Shankar, President, MEPZ (Madras Export Processing Zone) Manufacturers' Association.
Reacting to the Exim Policy announced on Sunday, he said that the Government's decision not to convert more of the existing export processing zones into special economic zones (SEZs) was a welcome one.
In an SEZ, there is no distinction between products utilising raw material sourced locally or imported while accessing the domestic tariff area (DTA).
The exporter will have to pay both the countervailing duty and the Customs duty.
However, in an EPZ, the exporter will have to pay only the excise component to access the DTA for products utilising raw materials sourced locally.
This is crucial in ensuring competitiveness and important to exporters in low value-added segments such as light engineering and garments, he said.
"The decision to expand the number of SEZs is a welcome move, which will enable the establishment of focused and new zones."
The specific benefits to exporters, particularly the option of 100 per cent retention in EEFC, and green card holders are some of the positive measures announced, Mr Shankar said.
"This will allow exporters to hold 100 per cent of the foreign exchange earnings in the EEFC account, as against the existing limit of 25 per cent, and will give them an option to hedge and make the conversion when it is advantageous."
He added that the extension of repatriation period of export proceeds from 180 days to 360 days was another welcome measure, alongwith the other measures regarding credit and the overseas branch concept for banks. The announcements also outline several measures to support State Governments to create an enabling environment for the exporters; for instance, the assistance to tackle infrastructure gaps and funds assistance based on gross exports and the export growth.
If the State Government could work in close co-ordination with the Centre, it would help tackle various issues relating to infrastructure and labour, Mr Shankar said.
The measures regarding industrial clusters will help identify new ones and boost the existing ones like the Tirupur cluster in Tamil Nadu.
The decision to include new markets under the market access initiative will help focus on developing markets.
Agriculture exports, agriculture export zones and the focus on agriculture are all measures that represent long-term benefits, he added.
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