Shenzen-style EXIM Policy puts 714 items including cigars on free-import list

Other products which come under the category of 714 items which are now freely importable include tableware, building items such as bricks and tiles, milk products, soft drink concentrates, coffee, tea, and diamonds, emeralds and rubies. Also in this list are items like milk, wheat flour, common salt and electronic and consumer items including music systems

Units in the Special Economic Zones will be given a lot of flexibility, and will be able to import capital goods and raw materials duty free and would also be able to access these from the Domestic Tariff Area (DTA) without payment of terminal excise duty. Within the SEZ, no permission would be required for inter-unit sales or transfer of goods.

The problem with the move towards Shenzen, however, is that unlike in China, there will be no flexibility of hire and fire in these zones, which is what most exporters and chambers of commerce demanded today. Maran tried to meet their demands by saying that he has written to state governments saying that if a unit exports more than half of its turnover, strikes should be made illegal — but any decision on this can only be taken by states.

In keeping with the agreement reached with the US, Maran moved 714 import items into the freely importable list. While local industry is unlikely to be hit badly by this, for the consuming classes, it represents a major step, as trading houses will begin importing them for select clients/high-spending groups.

Maran was announcing the new EXIM Policy against the backdrop of an export performance during the first 10 months of the current year (April-January) recorded at $ 30.22 billion, an 11.32 per cent increase over the same period last year. Exports, however, declined in January, 2000 recording a negative 2.33 per cent growth.

Maran announced an outlay of Rs 250 crore fund involve states to participate in a big way in promoting export growth in the country.

Announcing sector specific incentives, Maran has earmarked a few sectors which have export potential. These include gems and jewellery, agro-chemicals, bio-technology, pharmaceuticals, leather, garments, silk and granites.

Simplifying norms for imports of inputs and raw materials for export purposes, the new EXIM Policy exempts advance licences for such imports from levy of any types of taxes and duties like customs duty, counterveiling duty, special additional duty, anti-dumping duty and safeguard duty. Only advance licences for “deemed exports” would be exempt only from basic customs duty.

The EXIM Policy also extends the Export Promotion Capital Goods Scheme (EPCG) to all sectors without any threshold limits at a uniform five per cent duty. Earlier, the EPCG scheme allowed for concessional import of capital goods like plant machinery and equipment for firms undertaking exports. The new policy has also withdrawn the 10 per cent countervailing duty on imports under EPCG.

In a major effort to rationalise the existing export promotion schemes and to improve availability of inputs or raw material for exports, Maran announced the introduction of a post-export duty-free replenishment scheme for over 5,000 export products.

Under this scheme, exporters would be able to obtain transferable duty-free replenishment certificates for importing inputs used in export products as per standard input-output norms.

Bowing to the demand of the trade and industry, Maran has decided to continue the post-export duty entitlement pass book (DEPB) scheme till March 31, 2002 but scrapped pre-export DEPB scheme.

Under the Special Economic Zone Scheme, the government has alreadyreceived two proposals, from the Gujarat and the Tamil Nadu governments for setting up if these zones. Within these zones, exporters would have full flexibility in operations. They would be able to import capital goods and raw materials duty free and would also be able to access these from the Domestic Tariff Area (DTA) without payment of terminal excise duty. Within the SEZ, no permission would be required for inter-unit sales or transfer of goods. The only condition applicable to firms operating here would be that they would have to export 100 per cent of their produce. DTA sales would be allowed only after payment of full customs duties and other additional duties without any concession.