Finance Minister Nirmala Sitharaman’s provisions in the budget this year have drawn a mixed response from exporters and industry stakeholders.
Independent trade professional Manasvi Srivastava says that the budget has not proposed major fiscal or policy changes to encourage exports. Proposed sectoral changes include measures on the expenditure as well as on the revenue side. “These include financial and infrastructural support for seafood as well as e-commerce exports. BCD has been reduced on certain broodstock, polychaete worms, shrimp and fish feed to 5%. Besides this, customs duty on various inputs for manufacture of shrimp, fish fe ..
On another front, Srivastava adds that no changes were seen in the MOOWR scheme, RoDTEP scheme or the drawback schemes; these schemes provide an opportunity to reduce costs for some of the exporters. “Simplification of onerous procedures in customs like the treatment of related-party transactions is also an unfulfilled hope as is the institution of accountability of adjudicating authorities for orders passed by them. Hence reforms that could have a significant impact on facilitating foreign trad ..
With an approximate 23% contribution to GDP, export is integral for the country to chart its growth plans and achieve them.
Sanjay K Jain, Chairman of ICC National Textiles Committee, says that there is “nothing specifically” for textiles except the reduction of import duty on the main raw material of spandex yarn. The budget allocation for the sector, however, spells good news. “This time it is Rs 4,300 crore, against last year's spending of Rs 3,400 crore. So, hopefully, funding of ongoing schemes won't suffer.”
Jain points out that there are indirect benefits for the garment industry, which is labour-intensive and largely dominated by MSMEs. “There are specific incentives for employment and various measures to ease credit cost and access to MSMEs. Further, skilling initiatives announced this time will help the industry,” he states.
Puran Dawar, Chairman, Agra Footwear Manufacturers and Exporters Chamber (AFMEC), expresses relief that their demand for removal of 10% duty on leather was accepted. “Leather has been included in the duty-free IGCR list. The government says it can now be imported duty-free for export through an online process. But we have to see the move's impact on duty drawbacks, etc. Thus, we would like to wait for finer details and clarity on processes in a week's time,” he states.
He also says that it is a positive step that the 40% export duty on the export of wet blue and crust leather has been reduced to 20%. “The export of leather has fallen from $2 billion to $500 million. There will be an increase in the export of leather,” he says.
However, Dawar is disappointed that the Union Budget 2024 did not review the new rule that mandates payments to MSMEs within 45 days of receiving goods or services. “The 45-day payment rule and the non-repeal of Section 43B(h) may discourage corporates from having MSME vendors and flies in the face of other enabling provisions for MSMEs announced by the finance minister,” he states.
Other industry experts say the budget has some measures that will help small businesses. Vikas Singh Chauhan, Director, Home textile Exporters Welfare Association (HEWA), says hiking Mudra loans from Rs 10 lakh to Rs 20 lakh is good news for several entrepreneurs in the textile industry, particularly those belonging to the micro firms category. “They can start their factory at Rs 20 lakh and set up 5-10 big machines using that amount,” he adds.
Ashwani Kumar, President of the Federation of Indian Export Organisations (FIEO), states that setting up of e-commerce export hubs under the PPP mode will enable MSMEs and traditional artisans to sell their products at international markets as well as promote trade and export-related services under one roof. “This will further help in promoting the districts as export hubs and the One District One Product (ODOP) scheme of the government. Showcasing such products can benefit artisans, craftsmen a ..
The FM announced this major incentive considering the growing importance of efficient maritime traffic. The budget also said there would be no duty on specific manufacturing materials for vessels and shipbuilding. The FM's announcement has come at a time when there were reports of the country's shipments grappling with escalating costs and disruptions caused by the Red Sea crisis.
Source Name : Economic Times