New Delhi, Sep 15 : Welcoming the much needed booster for the exports sector, the apex trade promotion organisation, Federation of Indian Export Organisations (FIEO) has said the announcement made by Finance Minister Nirmala Sitharaman has come at a time when there are signs of worsening global economic conditions pointing further downward revision of global trade growth.
''The slew of new measures announced for the exports sector in the form of incentives and refund of taxes, export finance, export facilitation, free trade agreements, engineering and handicrafts will not only go a long way in enhancing the growth prospects of the sector in the short-term but will also give it a much needed boost in the medium-term and long-term and will stimulate the overall economy,'' FIEO president Sharad Kumar Saraf has said on Saturday.
The new scheme of Remission of Duties or Taxes on Export Products (RoDTEP) with revenue burden of up to Rs 50,000 crore for the government, will completely replace all Merchandise Exports from India Scheme (MEIS) from January 1, 2020 with the expectation that the new scheme will be more than adequately incentivize the exporters than the existing schemes put together, the FIEO Chief said.
''The new scheme looks attractive as it will neutralise all duties and levies suffered by the export products. Giving three months lead time till December 31 to the existing MEIS will remove the uncertainty creeping in the minds of the exporters and will greatly help to finalise their export orders, Mr Saraf said.
Further, fully electronic refund module for quick and automated refund of ITC by September, 2019 will help the exporting community in not only speedy and timely refund of their GST but will also help them in getting their long pending refund of their ITC thereby mitigating their working capital requirements, he maintained.
Mr Saraf stated that besides measures taken to improve credit outflows from banks and transmission of interest rate cuts being affected by banks will go a long way in improving the cost and availability of credit, as the flow of credit to this sector has been under pressure since long.
Expanding the scope of Export Credit Insurance Scheme (ESIC) by ECGC will enable reduction in overall cost of export credit including interest rates especially for MSMEs. The scheme will provide much needed support for the exporters for exporting to countries with little or more risks reiterated FIEO President.
Announcement on the revised Priority Sector Lending (PSL) norms for export credit, will release an additional Rs 36,000 crore to Rs 68,000 crore as export credit along with an active monitoring by an inter-ministerial working group in the Department of Commerce, tracked through a dashboard will also help in keeping track of the overall export financing for the sector, added the FIEO Chief.
Mr Saraf also said leveraging technology to reduce turnaround time at ports and airports through seamless digitization process of export clearances is also a welcome step, which will further reduce transaction cost and time. Holding of annual mega shopping festivals like Dubai Shopping Festival will not only boost exports but will also help in creating value for Brand India products from labour-intensive sectors like Gems and Jewellery, Handicrafts, Yoga, Tourism and Textiles.
The FIEO president said that online "Original Management System" for exporters will enable them to obtain Certificates of Origin, which is further expected to improve ease of doing business for exporters. Time-bound adoption of mandatory technical standards will not only elevate quality and performance, enhance competitiveness and address issue of sub-standard imports but will also give a boost to Indian products overcoming non-tariff barriers.
Besides initiative on affordable testing and certification infrastructure will reduce cost of adoption of standards and certification for meeting international standards under different FTAs. Enabling handicrafts to effectively harness e-commerce for exports has come as a special facilitating tool for artisans to sell their products globally.
And last but not the least, the FIEO Chief stated that announcement on the FTA utilization mission headed by senior officials from the Department of Commerce will be set up and will work with FIEO and other export houses to utilise concessional tariff in each FTA.
The initiative which was one of the demands of the Federation will be able to enhance awareness of preferential duty benefits MSMEs and disseminate and facilitate compliance requirements under FTAs for both importers and exporters.Ms Sitharaman on Saturday announced a slew of measures aimed at boosting exports, including a new scheme to incentivise exporters and a higher insurance cover to banks lending for exports. Announcing easier rules for lending to priority sectors, Ms Sitharaman said the measures could lead to export credit rising by Rs 36,000 crore to Rs 68,000 crore.