The rupee appreciation issue, which is haunting the pharmaceutical and other exporters in the country, will be addressed soon with the matter being actively considered by the Prime Minister's Office (PMO).
Addressing the India-LAC (Latin American Countries) pharma meet in Hyderabad, Union minister of state for finance, Pawan Kumar Bansal assured the industry that 'pharmaceutical exporters in the country will not suffer from the effect of rupee appreciation. The issue has already been brought to the notice of Finance Minister and Prime Minister and is being considered seriously by the PMO.
The minister said that extension of credit period from present 180 days to 360 days and income tax exemptions to export-oriented units (EOUs) are also under consideration of the government. Currently the pharma industry gets 180 days extension period for realisation of export proceeds. The time period for income tax exemption given to EOUs will expire in 2009.
D B Mody, chairman of the Pharmaceutical Exports Promotion Council (Pharmexcil), in his speech, emphasised that the government should mitigate the impact of rupee appreciation on exports. He suggested the extension of time period for realisation of export proceeds from 180 days to 365 days with availability of post shipment credit up to 360 days at an annual interest rate of 5 per cent. He also suggested income tax exemption to EOUs, monetisation of future earnings through External Commercial Borrowings (ECBs) against their further exports and VAT integrated DEPB (Duty Entitled Pass Book scheme) system.
Mentioning about the aim of India-LAC meet, Mody said, "This is the platform for the buyers and sellers from both regions through which we aim to further increase the business with Latin American Countries. There is a lot of potential to grow further for both the regions, particularly Indian exporters." The export figures to Latin America stand at $400 million for the financial year 2005-06. This is expected to grow by 25 per cent.
The potential market is estimated around $15 billion.
The Drug Controller General of India, Dr M Venkateswarlu, spoke on various regulatory dealings in India with special emphasis on quality of the drug.
The meet is being attended among others by 50 foreign delegates including FDA officials from 22 Latin American Countries and Caribbean region. The focus of the event is on one-to-one buyer-seller meetings. The three-day conference will conclude on June 29.