Ministry plans sectoral review of exports next month
The Commerce Ministry will initiate a sectoral review of exports next month in the light of widening merchandise trade deficit levels.
Though a review was planned by the end of the current month itself, it has been postponed to enable the Export Promotion Councils concerned to be better prepared with inputs, official sources told Business Line.
The review by the Directorate-General of Foreign Trade and the Commerce Department would be completed by July-end.
Following this, discussions would be held with the Department of Revenue and other Ministries on extending additional incentives to exporters as a supplement to the Foreign Trade Policy scheduled for August-end.
Mr Ramu Deora, President, Federation of Indian Export Organisations, said FIEO would demand interest subsidy for small-scale exporters, reduction of transaction costs, the immediate refund of Additional Duty of Customs (ADC) to manufacturer-exporters, increased duty drawback rates and the notification of an all industry rate for service tax refund.
Exporters are expecting a growth slowdown from September due to a combination of factors including rising interest rates, unfolding troubles in major markets such as Europe, and the expiry of existing export incentives such as the Duty Entitlement Passbook scheme by then.
The Commerce Ministry, on its part, is worried about the rising trade deficit, which has touched $24 billion in the first two months of this fiscal (April, May). The Commerce Secretary, Mr Rahul Khullar, had cautioned that the trade deficit for 2011-12 could touch a record $145-150 billion.