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THE new five-year Export-Import (Exim) policy would give "an added impetus and momentum to the outward looking trade policy" followed for a decade with a distinct possibility of a compounded annual export growth of 12 per cent in dollar terms postulated in the medium-term export strategy "coming through'', says the Commerce Secretary, Mr Dipak Chatterjee.
In a post-Exim policy and first interview to Business Line here, Mr Chatterjee said that if a comparison is made between India's trade performance during the first decade of economic reforms from 1991-2001 with that of the previous 10 years, the opening up of the economy has paid "handsome dividends''.
He said unlike earlier policies when the removal of quantitative restrictions (QRs) formed part of the policy, this time there was no mention of imports at all as the whole focus was on how to increase exports. "We have tried to target as many Indians as possible and try to involve them in export efforts to see all get the benefits," Mr Chatterjee said.
Though the Exim policy is now a legal document under the Foreign Trade Development and Regulation Act, he said, "there are certain concomitant actions which need to be issued by the customs through notification'' and some of these actions need to be translated into law under the Customs Tariff Act, for which the work has already been initiated.
Mr Chatterjee said that in the case of giving transport subsidy for export of fruits, vegetables, poultry and dairy products, his Ministry and the Agriculture and Processed Food Development Agency (APEDA) would have to hammer out the details of the scheme. The launch of agri-export zones with some 20 such agri zones having been notified means that "what we export should meet standards and quality requirements'' for which further details would have to be drawn up by APEDA, he added.
On the Market Access Initiative (MAI), the Commerce Department has Rs 42 crore under the scheme, he said, adding that the Finance Minister was "quite receptive" to broadening the scheme as announced in the new Exim policy and details needed to be worked out by the department including setting parameters for broadening the scheme and getting them approved.
Mr Chatterjee noted that in the case of industrial clusters, the focus was initially on a few centres of excellence such as Tirupur, Ludhiana and Panipat which "we recommended for priority'' action. As these centres had come on their own, they need a little bit of help in order to improve the business environment in the form of services and certain other common facilities, he said. The department would sit with their representatives to ascertain their demands and take them up with the State Governments for follow-up action.
As there could be many several such clusters, there is need to identify them and their product specialisation, which the department would take up now, he said.
Mr Chatterjee said that there was "a perfect agreement'' the between Ministry of Commerce and the Ministry of Finance on the permission granted to SEZs or developers of SEZs in opening up ``overseas banking units''(OBUs) in SEZs and the whole concept was evolved only after "consultation and consent''.
He said that some of the proposals in the SEZs have to be translated into actual changes in law and the Ministry of Finance was aware of them and was taking action in this regard. The RBI is to issue guidelines for OBUs and also external commercial borrowings from these units.
Besides, all the State Governments have been aware of the need to free or reduce the distortion in the labour markets, which "we have to follow up''. He further said that everything on SEZs depend on "private promoters and nothing can happen unless they start" developing the zones.
Mr Chatterjee said that the work in reducing transaction costs need to be followed with the RBI in regard to getting the notification issued on the extension of repatriation period from 180 days to 360 days and 100 per cent retention in EEFC accounts for exporters.
Mr Chatterjee said that though export growth in February was by far the worst, a comparative study of South-East Asian economies show that they had consistently posted negative export growth throughout the fiscal 2001 till January 2002. This shows that there is a slowdown in the exports of most of the trading partners and "when you are opening up your economy you cannot insulate yourself against this". He said it would have been worse but for the policy interventions, which began showing up positive results from October 2001.
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