EEPC India organising seminar on doing business with Canada in Ahmedabad

Part of promoting 'India Show Canada' to be held in October

"India Show Canada", an initiative of the Ministry of Commerce and Industry, is being organized by EEPC India (set up by the Government of India) with the support of the High Commission of India in Canada and the High Commission of Canada, New Delhi.

The event is synchronized with the largest and most famous industrial exhibition in North America—the Canadian Manufacturing Technology Show (CMTS 2011), in Toronto, Canada from October 17-20. India is a 'Strategic Partner' for the exhibition.

With 2011 having been declared the "Year of India in Canada" by the Prime Ministers of the two countries, the Show has assumed added significance and is expected to generate considerable momentum for further enhancing India-Canada bilateral trade and investment relationship.

EEPC India is holding a number of road shows/seminars throughout the country to publicise India Show Canada. Among them is a seminar on "Doing Business with Canada" on August 3 in Ahmedabad. Interested participants can register for free by contacting EEPC India, Ashram Road, Ahmedabad at:

Contact to below mail addresses for more details:

eepcsroahd@eepcindia.net or sudhakaran@eepcindia.net

FIEO President: Policy stability and credit cost reduction can boost exports

Hailing the sharp 57 per cent increase in exports to $ 25.9 billion in May, Mr Ramu Deora, President, Federation of Indian Export Organizations (FIEO), said it was the sign of a robust global scenario, particularly in advanced economies, coupled with effective government initiatives.

According to him, if stability in policies is maintained and credit cost lowered, the country would be able to surpass this year's export target as well.

However, Mr Deora expressed concern over the import figures, which had climbed 54.1 per cent to $ 40.9 billion, resulting in a trade deficit of $15 billion. While stressing that domestic manufacturing should be encouraged to offset the huge deficit, Mr Deora said that the government should provide a level playing field to the industry.

CONCOR’s CFS-Gandhidham implements Indian Customs EDI System

The Container Corporation of India's (CONCOR) Gandhidham container freight station (CFS) has crossed another milestone by implementing EDI facility.

Indian Customs EDI System (ICES), an automated Customs transaction processing system, has been tested and commenced at CFS-Gandhidham. Automated procedures under Customs EDI system would help in reducing the number of manual processing stages and ensure a progressive move towards e-mode implementation of various procedures. This will facilitate electronic transmission of import/export documents/declarations to Customs from importer/exporter/custom house agent offices through ICEGATE (Customs e-commerce portal).

Given the growing volume of international trade, the need for expeditious clearance of goods at the port within
the minimum possible time has been gaining importance. This goal will be achieved by the implementation of EDI.

CONCOR's CFS-Gandhidham offers ex-im services like container stuffing, de-stuffing, acceptance, transit warehousing and delivery of cargo, container parking, container/cargo survey, cargo aggregation/segregation for exports and imports. It operates in a Customs notified area of 1.02 lakh sq. m and its physical infrastructure includes a 2,000 sq. m ex-im transit warehouse and a full length rail line connecting to the pan-India hinterland, ICDs/CFSs, Domestic Container Terminals of CONCOR and gateway ports.

The facility is equipped with state-of-art heavy equipment for handling cargo and containers. It serves as an off-dock Port Side Container Terminal (PSCT) for ports like Kandla and Mundra for containerised traffic. Besides, by providing integrated ex-im services, the CFS has played a decisive role in fulfilling the objective of developing/benefiting the surrounding areas.

CFS-Gandhidham has successfully catered to the ex-im needs of shippers and consignees exporting rice, cotton, marble slabs, agro products, etc. and importing HMS and bitumen in a big way. It offers economical public tariff for handling, storage and container transportation by rail and road.

Stakeholders’ views sought on review of ‘deemed export’ policy

With a view to preventing any misuse of the 'deemed export' policy, the Union government has invited comments and suggestions from stakeholders on the review of the policy by June 28.

Literally, the term 'deemed exports' means transactions in which goods supplied by main/sub-contracts do not go out of the country and payment for such supplies is received either in Indian rupees or in free foreign exchange, with the condition that such goods should be produced in the country.

In an inter-departmental committee meeting held earlier this month, it was decided that the committee, constituted under the chairmanship of Dr Anup K. Pujari, Director-General of Foreign Trade, to review the policy, would seek the views of stakeholders by June 28.

The committee's terms of reference include the following: harmonisation of Customs notifications with the policy, improving the drafting of the policy as it exists today so that it is not amenable to multiple interpretations, and, specifically, to do away with ambiguities and repetitions and revisiting the issue of deemed exports to see whether it properly reflects the government's priorities.

The Foreign Trade Policy regards the following transactions as deemed exports: supply of goods to export-oriented units, software/hardware technology parks, projects funded by multilateral or bilateral agencies, as well as for power projects and refineries.

CONCOR commissions ICD-Khodiyar, AHMEDABAD

The largest inland terminal in western India to facilitate ex-im trade under one roof

The Container Corporation of India's (CONCOR) inland container depot (ICD)-Khodiyar, part of its North West Region (NWR), was commissioned for ex-im operations last week with a slew of leading dignitaries in attendance. The facility was inaugurated by the Chief Commissioner of Customs, Gujarat Zone, Ms Lipika Majumdar Roy Choudhury, in the presence of Mr S.B. Singh, Commissioner of Customs, Ahmedabad, Mr Anil Gupta, Managing Director of CONCOR, Mr Harpreet Singh, Director (Projects & Services), CONCOR, Mr Rakesh Behal, Divisional Railway Manager, Ahmedabad Division, Mr Amit Kumar, Chief General Manager, CONCOR (NWR), Ms Saroj Ayush, Chief Manager, ICD-Khodiyar, officers of Customs, Railways, trade officials, invited guests and members of the trade.

Mr S. B. Singh inaugurated the administrative building.

ICD-Khodiyar, one of biggest ICDs in the Subcontinent and the largest in western India, is strategically located on the S. G. Highway over an area of 31.8 hectares, which will supersede the existing 12.8 hectare ICD-Sabarmati.

This state-of-art facility has been planned to cater to the growing ex-im needs of the region and offers smooth operations under one roof. It has 13,000 sq. metre transit ex-im warehousing space, besides three full length rail lines within the premises for linking major gateway ports like JNPCT, NSICT, GTIL, Pipavav and Mundra for the movement of exports and imports.

ICD-Khodiyar has been designed to handle more than 3 lakh TEUs per annum and will meet the increasing 15-20 per cent annual growth in containerised traffic in the western hinterland. Basic amenities like office space for transporters, surveyors, drinking water facility, two-wheeler parking, canteen and Sulabh public complex having bathing/toilet facilities are available at the ICD.

As part of a green drive, some of the key dignitaries planted saplings after the inauguration function.

The event saw participation from a large number of CHAs, shipping line managers, freight forwarders, LCL consolidators, members of ACHAA, ASAA and Exim Club, as well as other eminent personalities from the trade. The committee members of ACHAA, ASAA and Exim Club presented bouquets and congratulated Mr Amit Kumar, Ms Saroj Ayush and other CONCOR officials for the launch of ICD-Khodiyar.

For enhancing manufacturing exports, Government set up Panel to Plan Strategy

A government panel, headed by the Commerce Secretary, has been set up to work out a sector-wise strategy aimed at giving a fillip to the manufacturing sector exports over the next five years.

While the strategy, which will form a part of the 12th Five-Year Plan proposal, could take up to two months to formulate, the panel will focus on the engineering, leather, gems and jewellery, textiles and sports goods sectors.

Of late, the government brought to light a strategy paper on exports growth, which has set a target of about $400 billion for export of manufactured products by 2014. It may be noted that manufacturing goods accounted for about 80 per cent of the country's total exports, which shot up 56.9 per cent year-on-year to $25.9 billion in May.

Although the Prime Minister, Dr Manmohan Singh, has set a goal of enhancing manufacturing as a percentage of the country's gross domestic product (GDP) to 25 per cent from the existing 16 per cent, curbs on output could act as a deterrent.

With India making forays into new regions, the growth of manufactured products exports has shot up in the past few months. Economists opine that country would have to raise its export competitiveness in order to accomplish a higher level of sustainable growth.

Exporters demand reintroduction of interest rate discount scheme Following RBI's Rate hike

Reserve Bank of India's (RBI) recent move to hike key lending rates, exporters have once again raised the pitch for reintroduction of interest rate discount scheme.

However, the government maintains that it is not likely to happen soon as it needs time to work on the funding requirement to sustain the high-cost scheme.

Acknowledging the fact that export credit costs were rising, a Commerce Department official said they had already started calculating their fund requirement for handing out subvention to exporters.

In this regard, the Department will have to prepare a list of the beneficiaries on the basis of matching the amount required with the funds available with the Finance Ministry. With regard to the need to provide interest rate discount, the official, while conceding that it certainly was on the radar, said it would take some time.

Exporters deem that frittering away time in taking such decisions impacts product pricing and could result in loss of potential buyers.

Accusing the government of not understanding the competitiveness existing in the marketplace, a senior official of the Delhi Exporters Association pointed out that even a one per cent difference between the price quoted by them and the competition was enough to cost them their customers. According to him, it is imperative to be aware of one's own costs as it could go a long way in helping quote the most competitive rates.

Apprising about the Association's plan to meet the Finance Secretary soon, the official said he would try to convince him on the issue and ask for an early announcement of the subvention scheme.

DEPB scheme likely to be extended further

The Duty Entitlement Pass Book (DEPB) scheme for exporters is likely to be extended for a few months beyond its current termination date of September 30, it is learnt.

The apparent reason for the move is the Commerce Ministry asking for adequate time to formulate an alternative to this popular scheme, which covers more than half of India's export basket. According to the Ministry, the September 30 deadline is unrealistic, given that there are as many as 2,750 items under the DEPB scheme. Determining the appropriate drawback rates for all of them would require a lot of paperwork and adherence to procedures, it reasons.

Exporters estimate that the transition from DEPB to an alternative duty drawback would require 9-12 months. They want the scheme to continue till the introduction of Goods and Services Tax (GST).

DEPB, which costs some Rs 8,500 crore to the exchequer annually, was earlier scheduled to end on June 30. The replacement duty drawback scheme is expected to reduce the fiscal burden by Rs 4,500 crore.

Since its benefits are determined by the principle of averaging rather than actual tax content in the export product, DEPB runs afoul of the relevant WTO agreement.

DGFT Drafting Paperwork for extra cotton exports quota

Following the Union government's approval on June 8, the registration formalities for the extra quantity of one million bales of cotton exports for the current season got underway recently.

Due to the declining prices of the natural fibre in the domestic market, the government decided to bail out the industry by permitting additional exports.

With the cotton season being from October to September, the Directorate-General of Foreign Trade (DGFT) will accept applications for new registrations till June 25.

It may be recalled that the government had imposed a quantitative restriction of 5.5 million bales on cotton exports in October 2010 when prices of the natural fibre had soared.

According to the DGFT, the applications for registrations would be processed till July 5 and the quota allocated on July 6 on a proportionate basis. Besides, exporters will get nine days to fill their documents, beginning July 7, while shipments will be completed by September 15, the DGFT said.

Key Features and Facilities at ICD Khodiyar AHMEDABAD

• Land area: 31.8 hectares
• Rail lines and network: Three full length rail lines with provision to handle 3 trains simultaneously. The ICD is connected by electrified railway lines from the adjacent Khodiyar railway station at a distance of 500 m. It will provide rail linkage to gateway ports like JNPCT, NSICT, GTIL, MICT and PPSP.
• Approach road: Two-lane concrete roads connect the S.G.Highway.
• A facility outside the municipal limits with easy access to the National Highway: Khodiyar is located outside the municipal limits and is directly connected to National Highway 8A C with a broad and easy approach road which is ideal for heavy vehicular traffic.
• Container yard: ICD-Khodiyar is paved with CC Blocks covering an area of 1,10,000 sq. m. The CY is also night-illuminated with high mast tower lights and equipped with reefer plug-in points. The CY has capacity to store 6,500 TEUs and can handle up to 3,00,000 TEUs per annum. It has been developed to stack containers in a planned way so that line-wise inventory can be maintained in a congestion-free environment. Cargo and container movement in the CY will be unidirectional.
• Real time track and trace of containers: Containers handled in the CY can be traced as a result of location recording via hand-held Radio Data Terminals (RDTs).
• Warehouses: Five state-of-art warehouses with area of 13,000 sq. m will be utilised for ex-im warehousing. All the warehouses are high-roofed and designed to enable cargo handling operations from both sides of the warehouse. The standard flow of cargo will reduce cargo turnaround time and increase space utility, facilitating better cargo handling.
• Truck/trailer parking: Truck/trailer parking with 8,500 sq. m area is available within the ICD premises at the entry and exit points, but outside the Customs bonded area. Approximately 80 trucks can be parked in the area, which has been provided with basic amenities like office space for transporters, surveyors, drinking water facility, two-wheeler parking, canteen, Sulabh public complex for bath/toilet units, etc.
• Container repair yard: An area of 1,000 sq. m has been earmarked as container repair yard within the ICD, where ISO containers can be repaired by certified surveyors.
• Gate complex: Two gate complexes have been constructed for easy entry/exit, where Customs and CONCOR staff will be available for documentation (at the gate only).
• Weighbridge and weighing scales: A 60-mt electronic weighbridge is available for weighing containers and cargo.
• Security and monitoring of operation: Round-the-clock security as per DGR norms, including ex-servicemen and gunmen, is available at ICD-Khodiyar.
• Bank on premises: Bank of Baroda will operate a branch at ICD-Khodiyar.
• Administrative building: It measures 3,000 sq. m over three floors and houses Customs and CONCOR administrative offices on the second floor, trade offices on the first floor and CONCOR and Customs ex-im cell with users' documentation area on the ground floor. There is also other offices/area for transporters, surveyors, bank, labour rest facility, storage for record and seals/samples. Provision also made for P&Q and ADC offices.
• Equipment deployed: State-of-art reach stackers to handle loaded and empty containers, mechanised cranes and forklifts with attachments for handling cargo and containers, trailers for internal shifting and train examination centre provided inside the ICD.
• Other VAS facilities: Container repair facilities, cargo fumigation, palletisation, lashing and chocking for securing cargo in containers and allied ex-im facilities.
• ETMS: CONCOR's Exim Terminal Management System (ETMS), e-filing on ETMS and information kiosks for fully IT-enabled services available.

Great News : CONCOR’s ICD-Khodiyar to be commissioned today

With area more than double that of ICD-Sabarmati, it is the biggest such facility in the WI region

The Container Corporation of India's (CONCOR) inland container depot (ICD) at Khodiyar, Gandhinagar, is all set to commence operations from Tuesday (June 21). One of the biggest ICDs in the Indian Subcontinent and the biggest in western India, it will be inaugurated by Ms Lipika Majumdar Roy Choudhury, Chief Commissioner of Customs, Gujarat Zone.

ICD-Khodiyar, strategically located on the S.G. Highway, is a state-of-art ex-im facility spread over an area of 31.8 hectares, which will supersede the existing 12.8 hectares of ICD-Sabarmati.

ICD-Khodiyar has been planned to cater to the growing ex-im needs of the region and offers smooth operations under one roof. It includes 13,000 sq. m of state-of-art transit ex-im warehousing space. The facility has three full length rail lines for providing connections to major gateway ports like JNPCT, NSICT, GTIL, Pipavav and Mundra for exports and imports.

The ICD has been designed to handle more than 3 lakh TEUs per annum and will meet the ever-increasing 15-20 per cent annual demand for containerised traffic in the western hinterland.

Government spells out plan to penetrate drug export markets

The Commerce Ministry's strategy paper on doubling export revenues spells out a two-pronged approach to penetrate the drug export markets.

As per the paper, the government seeks to either maintain the existing position or, wherever possible, enhance market share in regions where India's presence is already robust, such as North America, Africa and the European Union (EU).

While considering Mexico and Brazil as countries in Latin America having huge export potential, the government also intends to renew focus on countries within the EU and Africa where the rate of growth and market share have been substantially low.

The paper also spells out specific strategies to boost the volume of medicine exports to China and Japan.

It also proposes giving financial incentives to exporters on the lines of some other countries. According to a senior official of the Pharmaceutical Export Promotion Council (Pharmexcil), China provides $75 million as support to promote the bulk drug industry in the country, due to which even MNCs are setting up huge production facilities there. "We need to think on similar lines if our export advantage is to be retained," he says.

Government to impose 15 % duty on sugar imports

Considering that the country's sugar output is higher than demand and mills wanting to export, the Food Ministry has proposed imposition of 15 per cent import duty on sugar from July 1.

It may be recalled that the government, in February 2009, had abolished import duty to improve domestic supply. With the zero-duty notification expiring on June 30, a senior Food Ministry official confirmed that the ministry had proposed a 15 per cent import duty on sugar.

DEPB Scheme Extended till 30.09.2011 Public Notice issued

Finally the Government have extended DEPB for 3 months  and official Public notice issued for the same.Please refer to below Public Notice issued on dated 17.06.2011.

PUBLIC NOTICE  NO.    54 (RE-2010) /2009-2014

NEW DELHI DATED THE    17^th   June, 2011

                     

1.   In exercise of powers conferred under Paragraph 2.4 of the Foreign Trade Policy 2004-2009, the Director General of Foreign Trade hereby makes an amendment in Paragraph of 1.1 of the Handbook of Procedures, v1 (RE 2010).

 2.   The concluding phrase of Para 1.1 of HBP v1 reads "……except DEPB Scheme, which shall continue to be operative till 30^th June, 2011".  Government has now decided that the DEPB Scheme would continue to remain operative for another 3 months, i.e. till 30.9.2011.  Accordingly, the words "till 30^th June, 2011" would get replaced with the worlds "till 30^th September, 2011".

 3.   The amended para 1.1 of the Handbook of Procedures, v1 would now read as under:

 1.1  "In pursuance of the provisions of paragraph 2.4 of FTP, the Director General of Foreign Trade (DGFT) hereby notifies the compilation known as HBP v.1, HBP v.2 and Schedule of DEPB rates.  These compilations, as amended from time to time, shall remain in force until 31^st March, 2014, except DEPB Scheme which shall continue to be operative till 30^th September, 2011."

 4.   Effect of the Public Notice:

      DEPB Scheme gets an extension of 3 months from 30.6.2011 to 30.9.2011.

 Sd/-

( Anup K. Pujari)

Director General of Foreign Trade

 

Gujarat Government objects to Port Regulatory Authority Bill of Central Govt.

The Gujarat government has taken exception to the Union government's proposed Port Regulatory Authority Bill, claiming that it would prove detrimental to the development of ports in the country, especially those in Gujarat.

Mr Saurabh Patel, Gujarat's Minister for Finance, Industries, Planning and Petrochemicals, said the proposed Bill was aimed at taking away the autonomy and freedom of the state governments without taking into account the legal framework. The Gujarat government, he said, had already submitted its views on the draft Ports Authority Bill 2011 and was strongly opposing it.

Speaking on the sidelines of the 13th Maritime States Development Council Meeting which concluded here recently, Mr Patel apprised that the state government would request the Union government and the Shipping Ministry to have an open discussion on the matter.

The Minister highlighted that Gujarat's ports had achieved 12.34 per cent annual growth in traffic during 2010-11, which was better than the growth rate of 1.6 per cent of the Major Ports.

He stressed that as Gujarat has been a pioneer in port sector development, it had no need for such governing bodies. Besides, the state already has the Gujarat Maritime Board which has been doing the job of a regulator since 1981. "Hence, the very purpose of the draft bill is questionable," Mr Patel contended.

The Minister emphasized that under the federal structure, the Central and state governments should work in tandem and with mutual consent. Hence, "bringing such a bill would be detrimental to the development of not only Gujarat's ports but ports across the country," he cautioned

He reminded the Union government that autonomy and freedom were the two basic pillars of the success of maritime states.

Service tax on Rail freight deferred again

The government has once again, for the fifth time, deferred implementation of service tax on transport of goods by rail. It has now been postponed to January 1 next year. The latest date for implementation had been July 1.

The decision is attributed to the prevalent high inflation, as it is felt that levy of service tax on rail freight would adversely impact the domestic industry, especially cement and steel manufacturers.

Budget 2010-11 had brought transport of goods by rail under the service tax net from April 1, 2010, with the government looking to mop up about Rs 1,000 Cr. in 2010-11 alone.

Now, even if the levy comes into effect from January 1 next year, rail movement of pulses, food grains, petroleum products for the public distribution system, organic and chemical manure and motor vehicles would be exempt.

The 70 per cent abatement norm too would now come into force from January 1, 2012.

World Bank forecast : India’s FY12 growth will slip to 8.2 %

The World Bank has confirmed the slowdown theory on the growth of India's economy.

According to the multilateral lending agency, India's growth would moderate to 8.2 % this fiscal against 8.5 % a year ago, as high inflation had cut into disposable incomes and hence demand.

The World Bank, in its report on Global Economic Prospects, stated that the slowdown had stemmed from a moderation in domestic demand, as elevated inflationary pressures had reduced disposable incomes and household spending, and as more restrictive monetary conditions added to the dampening of investment activity.

Planning Commission panel set up to boost exports, FDI

The Planning Commission (PC) has set up a working group to recommend government policies aimed at enabling the private sector to meet the targeted increase in exports.

The latest move is bit of a surprise as it has come at a time when the government has made it clear that it will not extend the Duty Entitlement Passbook scheme (DEPB) for exporters beyond September.

With PC member, Mr Saumitra Chaudhuri at the helm, the group will not only identify policy measures to attract more foreign direct investment (FDI), especially in the manufacturing and infrastructure sectors, but will also assess India's experience with FDI and foreign institutional investors.

The group would also assess existing schemes for export promotion, to explore various methods to further encourage private players.

Besides, the panel will take stock of the country's comparative advantages in trade, with specific reference to manufacturing goods and farm products, and whether these have moved over the past decade. In addition, it will make suggestions on how Free Trade Agreements and Comprehensive Economic Cooperation Agreements can be fitted into the framework of multilateral arrangements.

The group will take a view on the experience with special economic zones (SEZs) and other special trade facilitating measures, at a time when SEZ developers are voicing their disapproval of the government's bid to impose Minimum Alternate Tax (MAT) on them.

Lastly, the panel will take stock of market assess issues, including non-tariff trade barriers.

Extend DEPB till introduction of GST: FIEO ask Revenue Department

Appreciating the Revenue Secretary for consenting to Fieo's plea for extending (by three months) the Duty Entitlement Passbook (DEPB) scheme, Mr Ramu S. Deora, President, Federation of Indian Export Organisations (FIEO), called for the relevant notification to be issued immediately so that the uncertainty over the extension is brought to an end.

The FIEO President also suggested that the DEPB scheme should be allowed to continue till the introduction of the goods and services tax (GST), as it would not be possible to fix the drawback rates for all the products for which DEPB rates exist in the short span of three months.

In the long run, Mr Deora feels that the government should definitely bring all products under the All Industry Duty Drawback Scheme, and should make the industry bodies a party while fixing rates to ensure accuracy of data and transparency.

Empty ISO containers repositioned to ICD-Khodiyar

The Container Corporation of India (CONCOR) North West Region has announced that in accordance with the shifting plan to ICD-Khodiyar, the latter handled its first train of empty ISO containers on June 10. The train was booked from Mulund to ICD-Khodiyar (CKYR).

Two more trains carrying empty ISO containers from Nagpur and Mulund are in movement and will be handled at ICD-Khodiyar. All future booking of empty ISO containers to Ahmedabad will be repositioned to CKYR, an official release said.

These repositioned empty ISO containers are planned to be utilised by shipping lines/freight forwarders for factory stuffing/container freight station (CFS) stuffing ex Khodiyar and will be eventually exported from ICD-Khodiyar.

As reported in Exim News last week, CONCOR has informed of the shifting of ex-im operations from ICD-Sabarmati to ICD-Khodiyar with effect from June 21.

Finance Ministery gives 3 months extension to DEPB Incentive scheme for one last time

The Duty Entitlement Passbook (DEPB), the popular-export incentive scheme, has got a three-month extension from the Finance Ministry. It was to end on June 30 Good news for the Exporters.

However, the Ministry has made it clear that exporters should brace themselves to switch to the duty drawback scheme by October as it would not grant any further extensions to DEPB.

According to a source, by permitting exporters to enjoy the benefits offered by DEPB for three more months, the government wants to ensure a smooth transition to the new scheme.

The source apprised that a three-member panel, comprising Secretaries from the Commerce and Finance ministries, would work out the modalities of migration to the duty drawback scheme.

Last week, the Finance Minister, Mr Pranab Mukherjee and Commerce Minister, Mr Anand Sharma met and discussed the issue and decided to extend the scheme.

It is a known fact that the Finance Ministry is firm on ending DEPB, contending that it allows exporters double benefit instead of just neutralising the import duty on inputs that go into exports.

In 2010-11, the scheme cost the exchequer Rs 8,520 crore, of which more than 60 per cent was exploited by large engineering and chemical exporters.

In contrast, the drawback scheme just neutralises levies paid on inputs. The rates are fixed annually, based on the changes in the duty structure in the Budget.

In this direction, an expert panel headed by Planning Commission member Mr Saumitra Choudhury will evaluate the duty drawback rates for all export products, including those covered under DEPB now.

Besides, the Finance Ministry has also asked the Commerce Ministry to direct export promotion councils to provide relevant data to the panel. The industry is not against the DEPB phase-out, as long as a substitute scheme is in place.

Extension in DEPB incentive scheme will be welcomed by Export eternity but at the same token only 3 months extension from Finance Ministry and also adviced to exporters to switch to Drawback scheme will not be easy for the major Group of the Exporters.

Ex-im operations shifting from ICD-Sabarmati to ICD-Khodiyar on June 21

The Container Corporation of India (CONCOR) has intimated the shifting of ex-im operations from inland container depot (ICD)-Sabarmati to ICD-Khodiyar with effect from June 21.

In a trade notice, it informed that ICD-Khodiyar, located near Khodiyar railway station, Sarkhej-Gandhinagar Highway, Dist. Gandhinagar, has been notified by the Commissioner of Customs, Ahmedabad as Customs Area under Section 8 of the Customs Act 1962, vide Customs Notification No. 4/2011-Customs (N.T.) dated June 6, for de-stuffing/stuffing of import and export cargo and clearance thereof.

The notice added that CONCOR has been appointed as "Custodian of the goods at ICD-Khodiyar for goods being cleared for home consumption or… warehoused or transhipped under Section 45 of the Customs Act, 1962".

Fieo asks Mr. Anand Sharma for interest subvention and DEPB extension

By DRAWING attention to the concerns over constant increase in export credit rate over the last one year, Mr Ramu S. Deora, President, Federation of Indian Export Organisations (FIEO), pointed out recently that exporters were competing with countries having credit rates below 5 per cent.

Speaking at an Interactive Session in Chennai recently, Mr Deora said that the base rate of Indian banks had moved up between 2-2.50 per cent in the last 7 to 8 months, pushing up export credit, but on the contrary, interest subvention for exports had been withdrawn from April 1, 2011.

According to the Fieo Chief, export finance cost, which was 7 per cent in July 2010, had now moved up to somewhere between 11-11.5 per cent, which is a whopping increase of about 57-64 per cent. Hence, Mr Deora urged the Commerce and Industry Minister, Mr Anand Sharma to prevail upon the government to draw the line between exports and domestic finance and make available export credit to the MSME sector at 7 per cent, and to others at 9 per cent in order to maintain export momentum.

On the DEPB scheme, Mr Deora acknowledged that it had been a time-proven instrument, helping Indian exports grow to the present level. "DEPB is well suited to the needs of small exporters, since it is not feasible for them to effect imports on their own account as economic volumes are not generated," Mr Deora said.

The Fieo chief observed that the uncertainty over continuation of the DEPB Scheme after June 30, 2011 had been a cause of concern to exporters, which could taper down growth. Hence, he urged Mr Sharma to extend the DEPB scheme till GST becomes operational or at least till the fiscal-end.

While suggesting a host of measures to cut transaction cost of exports, ranging between 7- 10 per cent of exports value, Mr Deora also alluded to the occurrences of long delay while ratifying the Norms for Advance Authorisation, issued under Paragraph 4.7 on self-declaration basis where SION does not exist.

Raising concern on the delays and paperwork involved in closure of advance authorisation at DGFT, the Fieo president contends that the same procedure should be put in force at the Customs also.

Mr Deora also asked the government to implement full EDI connectivity amongst the agencies involved in import/exports for seamless movement of cargo, which could go a long way in reducing transaction time and cost to a large extent.

Meanwhile, on the issue of DEPB extension and re-introduction of interest subvention, the Commerce Minister, Mr Sharma has made it clear that both issues have been taken up with the Finance Minister, who had given an assurance of adequately addressing the exporters' concerns.

Mr Sharma also announced that from now on the DGFT's zonal office would provide time-bound clearances, which would be audited every quarter. Besides, he also apprised that he was trying to make available the discharge of export obligations electronically in order to do away with the voluminous documents and delays.

The minister also assured that he would review the delays in imposition of provisional anti-dumping duty so that the same could be imposed in reasonable time, compared with the best practices. For providing commercial information to exporters, Mr Sharma agreed to strengthen commercial missions abroad and open more such missions.

With regard to the new manufacturing policy, Mr Sharma said it would be announced shortly with the aim of augmenting the share of manufacturing in GDP from 16 per cent to 25 per cent.

Exporters pin hopes on corporate India’s appeal to FM

EXPORTERS are counting on fresh representations by leading corporate houses to retain the popular Duty Entitlement Pass Book (DEPB) scheme, despite the Finance Ministry making it clear that it is not in favour of extending the scheme beyond June 30.

Finance Ministry estimates suggest that the DEPB drains about Rs 8,000 crore every year. The scheme neutralises the impact of basic and special Customs duties on the import content of exports. With the grant of duty credit against the export product under DEPB, exporters end up saving around 8-10 per cent on the cost of their exports.

Since it overcompensates exporters, the Finance Ministry feels DEPB is not WTO-compliant. It has asked exporters to fall back on the duty drawback facility, which does the same neutralisation by compensating for domestic taxes paid.

However, exporters are not too keen on lower duty drawback rates, as they feel that it under-compensates them because several domestic taxes are not considered. Both the Finance Ministry and the Commerce Ministry are of the view that all problems will be sorted out with the launch of the goods and services tax (GST).

But as GST may take a year to be implemented, exporters have once again begun lobbying with the Finance Ministry to extend DEPB. Their efforts have got a shot in the arm after the initiative of the industrial houses, who have taken up the matter with the Finance Minister, Mr Pranab Mukherjee. It is learnt that corporate leaders have made it clear to Mr Mukherjee that discontinuing DEPB would substantially hit
exports.

India to emerge as 3rd largest economy by 2030

THE Standard Chartered (SC) report 'India in the Super-Cycle' has drawn attention to the fact that the country is likely to emerge as the world's third-largest economy by 2030 and grow faster, on an average, than China over the next two decades.

Nonetheless, the report clarifies that growth could be hampered by other factors such as regulatory burdens, infrastructure bottlenecks; high oil prices and slowdown in foreign direct investment.

Mr Gerard Lyons, Chief Economist and Group Head, Global Research, Standard Chartered Bank, affirmed that it had factored in a growth rate of 6.9 per cent for China, allowing for setbacks along the way, and 9.3 per cent for India, again taking into account the business cycle.

The report states that the world may be experiencing its third 'super-cycle', which is defined as a period of historically high global growth, lasting a generation or more, driven by increasing trade, high rates of investment, urbanisation and technological innovation, characterised by the emergence of large, new economies, first seen in high catch-up growth rates across the emerging world.

The third super-cycle, according to the report, is led by India and China and other emerging economies, thereby shifting the balance of economic and financial power from the West to the East. "The winners of the super-cycle would be those countries which have abundance of cash or commodities," the report adds.

Keep fingers crossed on DEPB, Khullar tells exporters

EXPORTERS have been asked by the Commerce Ministry to "keep their fingers crossed" on their demand for extension of the duty entitlement pass book (DEPB), a tax neutralisation scheme on exports, beyond June 30.

Exporters have begun pressing their case with both the Commerce and Finance Ministries for continuation of the sops after the Revenue Department made it clear that the DEPB window would close from next month-end.

The Chairman of CII's National Committee on Exports, Mr Sanjay Budhia, pointed out that exporters across different sectors were worried as no alternative scheme was being offered in place of the DEPB.

According to an official, the Commerce Secretary, Dr Rahul Khullar, advised representatives of business chambers and export promotion councils, who called on him, to "keep their fingers crossed" as it was up to the Revenue Department to take the final call on the issue.

Mr. Anand Sharma (Commerce and Industry Minister) to plead case with FM for DEPB extension

With the aim of getting the Duty Entitlement Passbook Scheme (DEPB) extended, the Commerce and Industry Minister, Mr Anand Sharma, is set to hold talks with the Finance Minister, Mr Pranab Mukherjee.

DEPB, is a popular duty reimbursement scheme, was introduced 14 years ago and is set to end on June 30.

The scheme had been granted extensions on several occasions in the past due to demand from exporters.

Speaking on the sidelines of the India-Africa Forum Summit that concluded recently, Mr Sharma said, "We will be meeting the Finance Minister and his team soon to explain the concerns of the exporters. We will take up the issue of DEPB and also interest subvention.

It may be recalled that after the withdrawal of the interest subvention scheme by the government, the cost of credit had climbed to 11 per cent from 7 per cent. Besides, banks have also hiked their base rates, adding to exporters' concerns.

The Minister believes that withdrawing such incentives would hamper exports, hurt the economy and continue to widen the trade deficit.

Also, with oil prices having climbed to unprecedented levels, boosting exports was a necessity, according to Mr Sharma.

Presently, exporters shell out a slew of state-level and other kinds of taxes such as electricity tax, octroi, sales taxes, central sales taxes, none of which is rebated owing to the federal political structure and a convoluted tax structure. All of these taxes are expected to be subsumed in the proposed goods and services tax (GST).

A study conducted by the National Council of Applied Economic Research found that the impact of such taxes ranges anywhere between 1.5 and 12 per cent. Even the Ministry of Commerce and Industry has not succeeded in finding an alternative to the DEPB, though discussions have been on since five years.

Considering the high interest rates, the Minister feels that a differentiation needs to be made between amount of credit and cost of credit. "The situation is difficult though exports are growing at an impressive rate," Mr Anand Sharma avers. "We have had internal assessment within the Ministry and we are looking forward to a very substantive meeting with the Finance Ministry upon my return," he said.

Earlier this week, Revenue Secretary, Mr Sunil Mitra, had said that the government had taken the decision to discontinue the DEPB scheme in order to save revenue. The government currently reimburses duties worth around Rs 8,500 crore each fiscal under the scheme.

Considered a direct subsidy under the World Trade Organisation rules, trade partner countries have been putting pressure on the Indian government to do away with the scheme.

Lets Hope the Finance Minister Agrees to the Commerce Minister Plea.

Brand rate scheme to replace DEPB

PLANS are afoot to supplant the duty entitlement passbook (DEPB)
scheme, the popular tax remission scheme for exporters, with a new
one, where rates would be brand specific, government sources informed
recently.
In place of the industry-average norm being used under DEPB, benefits
would be quantified on the basis of actual consumption of imported
inputs by the manufacturer-exporter under the new scheme.
The government has made it clear that the DEPB scheme would cease to
exist after June 30, considering that it was perceived as being
WTO-incompatible due to its alleged subsidy component.
Large manufacturing firms, including automobile and metal majors, are
expected to welcome the move to supplant DEPB with a brand rate
scheme, but smaller firms may find the new scheme unappealing.
According to sources, all products (defined by the harmonised code
system) now falling under DEPB would also be incorporated into the
duty drawback scheme for the benefit of smaller companies.
Nonetheless, these firms, in particular from labour-intensive
industries such as textiles and leather, are unlikely to be pleased as
the drawback scheme is known for being more rigorous on rate fixation.
A Finance Ministry official affirmed that the government was keen to
shift from notional claims by exporters to actual ones, and hence
brand rate fixation scheme was one of its options. He said the Finance
Ministry and Commerce Ministry were still working out the details.
The official revealed that for fixing the brand rate, applicants have
to file with the Commissioner of Drawback, who will fix the rates
after getting the verified data from exporters. Importantly, the brand
rate scheme would be fully compliant with WTO's agreement on subsidies
and countervailing duties, the official assured, while admitting that
many things still needed to be resolved before shifting to the new
scheme.

DEPB scheme to end on June 30 – Mitra

Rejecting exporters' repeated pleas, the Finance Ministry today said the popular DEPB tax rebate scheme will come to an end from June 30, saving revenue for the government.

"All exports will be zero-rated after Duty Entitlement Pass Book (DEPB) scheme ends. Two similar kind of schemes cannot go on. It will save some revenue for the government," Revenue Secretary Sunil Mitra told reporters here.

The government spends about Rs 8,000 crore on rebating exporters for levies under the 14-year old DEPB scheme. After repeated extensions, the scheme is to end next month, but exporters are lobbying hard for its continuation.

Official sources said that exporters can avail a refund of local taxes through the alternative window of duty drawback.

The officials of finance ministry have declined the request to continue the DEPB scheme, now we awaits the Public Notice for the same.