In forthcoming Exim Policy 2003-04 to be announced on March 31, 2003, the Confederation of Indian Industry (CII) expects four procedural simplifications to be introduced in the Exim Policy, in order to provide a boost to the export performance of the Indian Economy. While the Exim Policy does not provide tax incentives to the exporting community, simplifications in the procedures can significantly aid in increasing both the value and volumes of Indian exports, CII has pointed out.
First, CII has pointed out that while in the existing policy there are a number of provisions to facilitate exports, the provisions are often plagued by lacunas that impede the full benefits of the schemes from filtering through to the exporters. One such scheme is the Duty Entitlement Passbook Scheme (DEPB). The objective of Duty Entitlement Passbook Scheme is to neutralise the incidence of Customs duty on the import content of the export product. However, presently the customs duty on fuel is not taken into account while fixing the DEPB rate and this works out to the disadvantage of exporters opting for the DEPB scheme. CII expects that this lacuna will be removed in the Exim Policy 2003-04.
Second, Project Exports from India have the potential to increase both value and volumes of total exports. In this backdrop CII expects that in order to catalyze project exports a separate chapter will be introduced in the Exim policy to take care of the specific requirements related to project exports.
Third, another popular scheme for exporters is Export Promotion Capital Goods Scheme that allows import of capital goods at concessional duty of 5% to manufacturer exporters, merchant exporters as well as service providers subject to commitment of specified export obligation over a period of 8 years. CII has pointed out that the mention of service providers goes unnoticed and many of the service providers are even unaware of this provision. CII expects that a separate chapter for service exports will be provided in the forthcoming Exim Policy. This measure would provide a boost to the export of key services such as Health Care, Education and Tourism, according to CII.
Fourth, the concept of Special Economic Zones (SEZs) introduced earlier is still to materialize, as these new SEZs have still not been made operational. Till date, only eight of the existing Export Processing Zones (EPZs) have been converted to SEZs. The various provisions related to SEZs have been incorporated in Handbook of Procedures Volume I CII is of the opinion that in order to expedite the development of new SEZs, the provisions should be put in a separate book for easy reference by foreign as well as Indian companies. CII expects that this will be done along with the Exim Policy 2003.