Centre should act swiftly to stem slide in exports
The sliding exports in October can be reversed and they can go north if the steps reportedly being considered by the Centre are taken to their logical conclusion, according to a review of overseas trade by FKCCI.
In our view, the Union Commerce Ministry should go ahead with certain proposals under consideration viz.
- Explore new markets in Africa and Latin America
- Offer exporters additional credit guarantees and tariff protection measures to boost exports and expand local manufacturing
- Hike basic customs duty on products where there is no anti-dumping levy
- Consider signing free-trade agreement opportunities beyond the traditional markets such as Common Market for Eastern and Southern Africa, Economic Community of West African States and Latin American countries such as Mercosur, Chile, Colombia and Peru and such other regions where growth in exports is expected.
- The Government should increase interest subvention from 2% and 3% to 3% and 5% as existed prior to Covid as interest rates are much above pre-Covid level.
- Further, the removal of export duty on steel should be followed up with incentivizing engineering clusters, in line with the expectations of the exporters.
- ‘The remission of Duties and Taxes on Export Products (RoDTEP) should also be extended to the steel, pharmaceuticals and chemicals sectors.
- Apart from incentivizing engineering clusters, the Government must also consider taking similar steps for the textiles and clothing sectors as well as they are labor-intensive industries.
New Bill on SEZ
FKCCI also looks forward to the passing of the draft bill on special economic zones in the winter session of Parliament, by which the SEZs will be revamped as development hubs and will be allowed to sell outside the demarcated area or in the domestic market, with duties only to be paid on the imported inputs and raw materials instead of the final products as was the case presently.