|
Secretary to the government and director general of foreign trade (DGFT) NL Lakhanpal spoke to S Venkitachalam and Harjeet Ahluwalia of The Financial Express about the broad thrust of the new Exim Policy. Excerpts:
Could you dwell on the broad framework within the Exim Policy 2002-07?
The basic theme this year and over the last two years has been to enlarge the export base with two steps every year for the long and medium terms. First, we announced the scheme for special economic zones and involvement of states, last year we introduced agriculture export zones and launched the market access initiative. This year we are focusing on moving towards critical mass and boosting industrial clusters.
A critical mass is emerging ... certain sectors have established surpluses, for instance, foodgrain, fruits, vegetables, in fact the entire agriculture sector; steel; cement; aluminium; yarn; petro-products and; fabrics. If we can help them ship out more of their produce, it would lead to better capacity utilisation — 60, 70 maybe even 100 per cent, it can be a big push to employment.
Again, at least 2,000 companies have been exporting all of their production for over 10 years. Obviously they are high-technology units, second to none in quality.
You mentioned industrial clusters?
A third element of critical mass is the industrial clusters manufacturing the same product around the same location, helping each other and having common service providers. Unido has identified 354 such clusters with high potential, of which 34 have a minimum annual production of Rs 1,000 crore or more, and some exceed even Rs 10,000 crore. If we incorporate them into the export effort, we can give them a big push.
When we say a critical mass is emerging in the export economy, we mean these sectors are at a stage where they can soon assume criticality and will become self-sustaining, not requiring government support or an Exim Policy, when annual exports reach $100 billion or the foreign exchange reserves stand at maybe $50 billion, say. It may take five years or 10, we cannot say. Our exports are resilient, they withstood the South-East Asian crisis, they managed to survive the crisis this year — we want to consolidate these emerging trends.
Is there a special significance in categorising the policy initiatives?
Yes. We have divided it into sections. SEZs is stand-alone, then we have employment-oriented sectors: whichever sectors are highly employment-oriented, like agriculture, cottage and handicrafts, small industry, leather, textiles and gem and jewellery.
The third group is technology-oriented — electronic hardware, chemicals and pharmaceuticals and projects. We have given them major boost to step up technology induction, so if these knowledge-driven sectors do not pick up, they will have only themselves to blame.
There is a section on status-holders too.
Yes, status-holders we are recognising as a key element of our critical mass. We have totally liberated them from DGFT, Customs, and from banks. Till now every exporter had to negotiate through a banks. This gave them an unfair advantage because they would charge exorbitant service charges. Now the exporters can go directly to the buyers, with whom they have established direct links, or banks would have to lower their charges.
I feel this is a revolutionary step.
Then again, we have allowed 100 per cent export earnings to be retained in the EEFC account. Earlier, they could not give more than 180 days’ credit, but now they have been given the flexibility to offer 360 days in order to be competitive in the global market.
We have made it trust-based as well — no questions asked so long as the exporter is going by the book.
What other measures will aid the export effort?
We have provided for fuel availability in captive generation at international prices — if it is bought domestically, there will be no excise duty, if it is imported, no customs duty will be payable. We have set percentages to the entitlement. Also, now there will be no disruption of business by seizure of stock in trade as penalty for failure to bring back foreign proceeds, even if the buyer vanished. Now as long as ECGC has honoured the claim, there would be no seizure and other proceedings could go on without affecting export production.
What about other export schemes?
We have also liberalised the DEPB (duty entitlement passbook) scheme, for instance. If the exporter has no DEPB entitlement but he has mistakenly claimed it, he can now take recourse to another scheme. Also, DEPB will no longer follow strict product rates; rather, the entitlement will be granted for the lower of rates applicable to the product used.
We have simplified advance licensing, and Customs intervention has been minimised. Then, the process for DEPB logging used to be very tough. We have dispensed with it.
Also, technical characteristics have been done away with. Samples have been made freely tradable, with a duty-free cap of Rs 100,000 on sample imports and no value or quantity restriction of export of samples.
|
|
