More cos may be allowed to export on self-verification.

NEW DELHI: Exports of leather, handicraft, carpets and some engineering goods are likely to get fresh incentives in the annual review of the foreign trade policy to enable them them tide over the poor demand in the Western markets.

The commerce and industry minister Anand Sharma is also expected to announce procedural changes in the policy to reduce transaction time and costs for exporters. The policy review is likely on August 23. “We are working out the allocations based on the funding sanctioned by the finance ministry,” a commerce department official said adding that incentives will be availble retrospectivley.

Incentives given to most of the identified sectors expired on March 31 2010.

The department is still not decided on whether textiles would get fresh benefits as the total value of textile exports is high and incentive to the sector takes up a lot of government’s resources.

Total exports from India posted a growth of 32% to $50.7 billion in the first quarter of the current fiscal, but some sectors such handicrafts, leather and carpet are still struggling.

“While there are countries in Europe like Germany and France that have recovered from the crisis, there are other that have defaulted and many more on the brink of default,” Fieo director general Ajay Sahai adding that the signs from the US are also not very encouraging.

Exports incentives are usually in the form of duty free scrips — valued at 2% of the export value — given to identified products for shipments to select markets.

The scrips can be either used to import products duty free or can traded in the market.

The procedural simplification under consideration will allow a wider set of exporters the privilege of shipping goods on the basis of self-certification as opposed to physical verification by customs officials.

At present, only large exporters based on volume of exports are allowed to certify their own goods, but in a limited number of sectors.

The documentation for filing for clearances is also expected to reduce.

“This is in line with the government’s policy of cutting down transaction costs and time for exporters,” the official said.

According to a study done by Fieo, transactions costs account for about 7% of costs incurred by exporters.

Simplified procedures and reduced costs could lead to direct economic gain of about $5 billion to exporters.

Last year, the government announced a five year foreign trade policy which will be followed with minor changes from time to time till 2014.

Source : economictimes.indiatimes.com