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Zero duty on exports of capital goods on cards |
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Indian merchandise exports may go green. Commerce minister Anand Sharma will consider zero duty benefits under export promotion of capital goods (EPCG) scheme to goods across sectors till March 31, 2014.
This will help companies avail benefits and import technology-advanced tools that are environment friendly. Zero duty EPCG scheme, introduced in April 2009 and currently valid till March 2011, could not yield desired results due to global slowdown and uncertainty in world trade.
Anand Sharma may extend the duty benefits under EPCG scheme in the foreign trade policy may be unveiled later this month.
“If zero duty is extended to all sectors, the industry will be prompted to go for greener technologies and advanced machinery. At the same time, revenue loss to government can be offset by additional export commitments as export obligations go up six times of the benefit availed,” Ajay Sahai, director general at Federation of Indian Export Organisation told Financial Chronicle.
Currently, almost all sectors, other than leather, some textile machinery and engineering products attract three per cent duty under EPCG.
“Zero duty EPCG is very important in engineering sector if the industry has to be competitive globally as it will help us upgrade to higher degree of automization. Moreover, in the scenario of rupee appreciation and labour shortage, higher automation at lower cost is the way out,” Khalid Khan, chairman, Geco Trading Corporation said.
Ramu Deora, chairman, G Amphray Laboratories that is into export manufacturing especially for SMEs sought refund of four per cent additional customs duty to make them competitive.
“While export stimulus should continue till March 2012, the centre should set interest rate on Exchange Earner's Foreign Currency (EEFC) account at par with Libor so that exporters can park their foreign exchange to take care of import payments without the hassle of fluctuations,” he said.
While it is expected that the labour incentive sectors like garments, handicrafts and leather may get some sops through incentive-loaded scrips, Indian exporters are also seeking level playing field in overall transaction costs.
“Right from the order stage to payment, the transaction cost in India is 8-10 per cent higher which needs to be brought down,” Subhash Mittal, chairman and managing director of Payal International, said: “He maintained that if zero duty EPCG scheme is extended to all sectors, it will lower the investment cost.
Source : mydigitalfc.com
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