New Delhi, Aug 27 The proposed Directorate of Trade Remedy Measures outlined in the foreign trade policy (FTP)on Thursday is not just an adjunct for extending trade defence measures but is an omnibus body to address the concerns of small and medium exporters on dumping, import surge and countervailing actions of overseas competitors.
Disclosing this to Business Line here in an interview, the Commerce Secretary, Dr Rahul Khullar, said that India has not so far taken any countervailing measure against a trading partner which subsidises exports and such exports causes injury to the domestic industry.
“We have taken action against dumping through Directorate of Anti-Dumping and import surge through the Directorate of Safeguards.
“What we have in the FTP now is to create an omnibus body to take all the three cases which are referred to trade defence or trade remedial measures in WTO jargon”.
Central sales tax
Asked about the lack of any measure to provide remission for State-level levies sustained by exporters, Dr Khullar said once the Goods & Services Tax (GST) is rolled out, it would end up amalgamating all State-level taxes.
“Hopefully, all other taxes would go — most important is the Central Sales Tax (CST), a classic example of a tax levied by a Central Act and collected by the State Government which is non-rebated” to exporters.
He said to the extent that GST amalgamates all taxes in one go and is integrated with the national system, “you typically have zero-rate export and this effectively implies that all State-level taxes would get refunded”.
He said only then, the rationale for continuing schemes such as the Duty Entitlement Passbook (DEPB) would end.
New markets
To a question about 39 new markets identified for products and markets which are far away from India and do not hold much attraction for exporters used to sending goods to Europe and America, Dr Khullar said markets such as South Africa, Brazil, Egypt, Nigeria and Mexico are not only very large but with whom India do huge trading in the past.
“We give exporters special benefits in these markets and tell them to try and sell more here, while you can’t sell in the US and the EU” due to demand decline now.
He said the policy has provided stability by keeping in tact all existing benefits to the exporters introduced in the wake of rupee appreciation and global financial meltdown since 2007.
He asked the exporters to be “content with difficult demand conditions even as we are trying to make life easier for you”.
Dr Khullar further said that when markets were down, the Policy has encouraged allowing status holders to import capital goods duty free of specified products equivalent to one per cent of their f.o.b. (free on board) value of exports in the previous year.
Upgrading technology
Exporters should use this downturn to retain their competitive edge by upgrading technology through duty-free import of capital goods to modernise and upgrade their capital stocks, he said.
On electronic data interchange (EDI) to help exporters realise the benefits of paperless documentation to cut down transaction cost, Dr Khullar said the experiment is being tested in 3 inland container depots (ICDS).
EDI facility
He said by early next month, the Revenue Department would apprise him of the timeline by which this could be extended to major ports and customs houses so that by December 2009, EDI would be well in place.
To a query about $200 billion merchandise goods target to be realised by 2011 when this was already announced as this year’s export target in February 2009 modifications to the annual trade policy, Dr Khullar said that the target deferred by two years reflects “careful, prudent and utterly realistic” ground level assessment, given the dismal global trade situation for the next few months.
Source : Business Line