Welcoming the much needed booster for the exports sector, FIEO President, Sharad Kumar Saraf said that the announcement made by the Hon’ble Finance Minister Nirmala Sitharaman has come at a time when there are signs of worsening global economic conditions pointing further toward downward revision of global trade growth. Slew of new measures announced for the exports sector in the form of incentives & 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 added Saraf.
FIEO Chief said that the new scheme of Remission of Duties or Taxes on Export Products (RoDTEP) with revenue burden of up to Rs. 50,000 cr 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 more than adequately incentivize the exporters than the existing schemes put together. The new scheme looks attractive as it will neutralise all duties and levies suffered by the export products. Giving three months lead time till 31st December to the existing MEIS will remove the uncertainty creeping in the minds of the exporters and will greatly help to finalise their export orders, 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, said Sharad Kumar Saraf.
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 cr to Rs. 68,000 cr 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 FIEO Chief.
Sharad Kumar Saraf also said that 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 to will not only boost exports but will also help in creating value for Brand India products from labour-intensive sectors like Gems & Jewellery, Handicrafts, Yoga, Tourism and Textiles.
President FIEO 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 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 the artisans to sell their products globally.
And last but not the least, FIEO Chief is of the view that announcement on the FTA utilization mission headed by senior officials from Department of Commerce will be set up and will work with FIEO and other export houses to utilize concessional tariff in each FTA. The initiative which was one of the demand 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.