India May Soon Announce Measures To Boost Subdued Exports
India is looking at cutting import duty on coloured gem stones and polished diamonds from the current 7.5 percent.
The government is expected to soon announce measures for certain sectors, including gems and jewellery, to boost India’s subdued exports, an official said.
The union finance and commerce ministries have held several round of talks on these measures, the official said.
As part of a proposal that is under consideration, the government may extend the deadline for removal of tax benefits to units in the special economic zones.
The government had In the Union Budget for 2016-17 announced that income tax benefits to new SEZ units would be available to only those entities that commence activity before Mar. 31, 2020.
For the labour-intensive gems and jewellery sector, government is looking at cutting import duty on coloured gem stones and polished diamonds from the current 7.5 percent. There is also a consideration to increase the insurance coverage by the Export Credit Guarantee Corporation of India for export credit from the current 60 percent to 90 percent. This would enable banks to provide export credit at competitive rates.
To promote domestic manufacturing and reduce imports, there is a plan for strict implementation of rules of origin criteria to check diversion of imports via countries with which India has free trade agreements. A standard operating procedure could be implemented for faster clearance of import and export consignments.
Exporters are demanding several other measures such as enhancing benefits of the Merchandise Exports from India Scheme for sectors like non-basmati rice and textiles, besides interest subvention for large pharmaceutical companies.
"Because exports are passing through tough times amidst global contraction in demand due to economic uncertainties, support measures for exporters would help in imparting further competitiveness to it," Federation of Indian Export Organisations Director-General Ajay Sahai said.
SC Ralhan, president of the Ludhiana-based Hand Tools Association, said refund of indirect taxes such as on oil and power, and state levies such as mandi tax would help in dealing with liquidity issue.
India's exports have recorded 2.25 percent growth in July. Cumulatively, during April-July in 2019-20, the exports dipped by 0.37 percent to $107.41 billion.