After a package for consumers, farmers and industry during the last few weeks, it was the turn of the exporters community to get a dose of ‘‘feel good’’ today from Commerce Minister Arun Jaitley. Unveiling a ‘‘trade facilitation policy’’ in place of a normal EXIM Policy, Jaitley made export-import easier by introducing electronic measures like applying for trade licences online and also access to electronic fund transfer and digital signatures. Reduction of red tape is the theme of the trade facilitation measures announced today with incentives like 50 per cent discount on licence fee for online applications. Besides this, there are four clear focus areas: a boost to the services and tourism sectors, jewellery exports, improving financial infrastructure for large exporters and easing import of capital goods for fertiliser and petroleum projects. Also, for the first time, the Government has allowed exports of fertilisers, an area so far considered sacred. What is surprising is that export of all fertilisers has been allowed, including urea, which is subsidised by the Government. Imports of office and professional equipment have been liberalised and will benefit the services sector. Import of gold and silver, while making no changes in their customs duty, has been allowed to help jewellery exporters. These exporters will now not have to go through agencies like the MMTC to import gold and silver and hence will save between 0.25 to 0.5 per cent commission charged hitherto payable to these agencies. Last year’s import exemptions to 3, 4 and 5 star hotels have now been extended to heritage hotels, I and II star hotels and stand-alone restaurants would be extended the benefits of duty-free import (liquor, linen, furniture, and other such goods) to give tourism a fillip. This has been a long-standing demand of the hotel industry which has been crying foul ever since 5-star hotels started selling cheaper liquor that threatened their business. The benefit of duty-free imports to hotels would be allowed under the condition that these concessions will be passed on to customers. But keeping swadeshi pressures in mind, imports of agriculture and dairy products remain on the banned list while the auto lobby has ensured that free import of cars will also face a freeze for now. The new measures also allow free import of fuel under what is called an actual user condition so as to mitigate the high power costs in the country and help exporters cut costs. Currently, fuel imports are only allowed by national oil companies in the public sector. While on the face of it, the procedural changes are designed to benefit the small and large exporters alike, some of the policy announcements are tailor-made for large exporters. Improving on export-related infrastructure, rupee payments received for Port handling services will be counted for discharge of export obligations under Export Promotion Capital Goods (EPCG) scheme. Here too, to cut red tape, a mere Chartered Engineers certificate would be enough to show that import of machinery was for export purposes rather than requiring a government committee to okay it. Also large companies will benefit because there is flexibility provided in this scheme wherein even if machinery is imported for a certain product, the obligation can be carried out through export of other goods under the same group companies. Fertiliser and refinery projects spilled over from the 8th and 9th plan will be given deemed export status which implies huge cost benefits and also subsidies from the government. The new policy has also addressed strengthening of the financial infrastructure for exporters by introducing a gold card scheme for credit-worthy exporters with good track records. The card will make export credit available easily and on good terms to be worked out by the Reserve Bank of India. Also the equity base of the Export Credit Guarantee Corporation (ECGC) is being hiked from Rs 500 to Rs 800 crore to ensure better risk management for exports. The sundry measures announced today include boosting R&D Activity through import of prototypes allowed to actual users without any limit. At present, the list is restricted to 10 per annum. The policy envisages that the ceiling of export of gifts abroad be raised from Rs 1 lakh a year to Rs 5 lakh.
