The pharmaceutical exporters in the country have sought Prime Minister Dr Manmohan Singh's intervention to restore the relief packages like increase in DEPB rate, interest rate subvention, etc to make the Indian industry more competitive in the world trade platform. The relief packages, announced by the government last year after the rupee substantially appreciated against US dollar, were withdrawn by the government on November 15 this year in view of the depreciation of rupee due to global financial meltdown.

"When there is recession throughout the world and all the currencies have been depreciating and the buying capacity of the country has reduced considerably, at that time, we have to be more aggressive to get more business. By withdrawing the relief package, our competitiveness has gone down," said Pharmaceutical Export Promotional Council (Pharmexcil)'s immediate past chairman DB Mody in a letter to the Prime Minister.

The exporters asked the government to direct the banks to provide dollar denominated pre and post shipment credit to exporters at LIBOR + 1%, and also to charge penal interest only for export outstandings that is export beyond 360 days. Presently, banks are charging penal interest, if the payment is realized beyond 180 days.

In case of realizations from certain developing countries RBI allows 360 days credit period for realization. Here also banks are charging penal interest if the payment is realized after 180 days. Banks should be advised to charge penal interest only for export outstandings beyond 360 days. ECGC should give the single policy to exporters who are targeting buyers in new markets, (i.e. those other than in US & in EU), the exporters asked the government.

The exporters also asked the government for some relaxations in Income Tax. All benefits available to EOU (export oriented units) including Income Tax benefit should continue for a further period of at least five years. Section 10AA (4) should be amended so that EOU's desiring to transfer the machineries to SEZ can do so without any difficulty. This will save unnecessary Capex which is in the interest of our country particularly in the hour of this financial crisis, Mody in the letter said.

Companies setting up EOU unit or SEZ unit, have to create in the beginning infrastructure entailing huge capital expenditure. Therefore they will not be in a position to make profits in the initial years. By imposing MAT on such EOU/SEZ units it would discourage new investment which will also not be in line with the government's desire to generate employment. 100% profits from SEZ units should be eligible for income tax exemption. Section 10AA (7) should be amended so that profits from SEZ units are not proportionately linked to the profits from total business, as SEZ is totally an independent activity and should be treated so, Mody in his letter said.