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  01 MAIN
   
   
  02 NEWSMAKER
   
   
  03 TRADE
   
   
  04 INVESTMENT / ECONOMY
   
   
  05 POLICY / INITIATIVES
   
   
 

06 FEATURE
   
   
  07 TRAVEL
   
   
  08 CALENDAR
   

   
  HIGHLIGHTS
   
 

Creating Silk Centres in the Country
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Growth in Food Processing Industries
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  Jewel of the South
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03 TRADE
 

418 Per Cent Growth in Exports from SEZs
and EOUs

Shri Kamal Nath, Union Minister for Commerce & Industry, has stated that the Special Economic Zones (SEZs) and Export Oriented Units (EOUs) have significantly contributed towards employment generation and encouraged manufacturing activity in the country. Speaking at the Export Awards function organized by the Export Promotion Council for EOUs & SEZs (EPCES) here, Shri Nath informed that during the period 2003-04 to 2007-08, exports from SEZs and EOUs have increased from Rs.42,641 crore to Rs.221,066 crore, a growth of 418% in four years.

Congratulating the export award winners, the Minister mentioned that SEZ success has been possible due to a participative and interactive approach between the government and industry. “In the last three years, incremental investment of more than Rs.90,000 crore have taken place in the SEZs. During this period, SEZs have provided incremental direct employment to over 2,27,000 people. Exports from SEZs have gone up from Rs.22,840 crore in 2005-06 to Rs.66,638 crore in 2007-08. By the end of December 2008, Indian exports from the SEZs stood at Rs.70,000 crore, crossing last year’s exports from SEZs”, he added.

During his address, Shri Nath said that some of the issues which are confronting the SEZ industry would be resolved shortly. In respect of EOU Scheme, we have extended the sunset Clause by one year and now the income tax exemption under Section 10-B of the Income Tax Act is available up to March 2010. We have taken up this issue further for extending the Sunset Clause by another 3 years.” Shri Kamal Nath also informed the participants that a meeting of all Export Promotion Councils was convened last month to get a first hand input from the industry.

Kamal Nath announces trade facilitation measures
New Delhi, 26 Feb 2009


The Union Minister for Commerce & Industry, Shri Kamal Nath addressing a Press Conference on the announcement of the Trade Facilitation Measures (Supplement to Foreign Trade Policy), in New Delhi on February 26, 2009.

Shri Kamal Nath, Union Minister of Commerce & Industry, while announcing the major trade facilitation measures (supplement to the Foreign Trade Policy), here, said that a Special Package of Rs.325 crore would be provided for leather, textiles etc., for exports w.e.f. 1/4/2009 and added that export incentives have been provided for certain items like technical textiles, stapling machines, handmade carpets and dried vegetables. Shri Ashwani Kumar, Minister of State for Industry and Shri G.K. Pillai, Commerce Secretary also attended the function.

In a mitigating effort to boost export amidst global slowdown, the Minister said that the recognition slab for Premier Trading Houses based on export turnaround has been reduced to Rs.7500 crore from Rs.10,000 crore. Under EPCG (Export Promotion Capital Goods) Scheme, in case of decline of exports of the product (s) by more than 5%, the export obligation for all exporters of that product(s) will be reduced proportionately. This provision has been extended for the year 2009-10, for exports during 2008-09. He further added that export obligation period against advance authorisations has been extended up to 36 months.

Speaking on the occasion, Shri Nath said that from now on, for import of precious metals, following bodies have been added as nominated agencies viz., STCL Limited, Diamond India Limited, MSTC Limited, Gem & Jewellery Export Promotion Council and Star Trading House (only for gem & jewellery sector). He further added that import restrictions on worked corals have been removed to address the grievances of gems & jewellery exporters. He further added that authorized persons of gems & jewellery units in EOU will be allowed personal carriage of gold in primary form up to 10 kgs. in a financial year, subject to RBI and customs guidelines.

As regards DEPB (Duty Entitlement Pass Book) Scheme, Shri Nath informed that as of now, duty credit scrip can be used for payment of duty only on items which are under free category, as a change, this unitilisation is now extended for payment of duty for import of restricted items also; duty credit scrip under DEPB will now be issued without waiting for realization of export proceeds; value cap applicable under DEPB have been revised to two products.

For advance licence issued prior to 1/4/20002, the requirements of MODVAT/CENVAT certificate will be dispensed with in case of Customs Notification prescribed for payment of CVD. The procedural formalities for claiming duty drawback refund and refund of terminal excise duty for deemed exports have been further simplified. Shri Nath informed that reimbursement of additional excise duty levied on fuel would also be admissible for EOUs (Export Oriented Units). With regard to clarification issued by CBEC in respect of architechtural services, general insurance services, market research services, storage and warehousing services and knowledge and technology based services, the Minister said that if these services are used outside India they will be treated as export of services.

In order to boost rural exports, the Minister announced that a re-credit of 4% SAD, in case of payment of duty by incentive scheme scrips such as VKGUY (Vishesh Krishi and Gram Udyog Yojana), FPS and FMS, have been allowed.
Bhilwara in Rajasthan and Surat in Gujarat have been recognized as Towns of Export Excellence, for textiles and diamonds respectively. In a measure to improve health infrastructure, Shri Nath said that export of blood samples is now permitted without licence after obtaining “no objection certificate” from Director General of Health Services (DGHS). He added that supply of an intermediate product by the domestic supplier directly from their factory to the Port against Advance Intermediate Authorisation for export by ultimate exporters, has been allowed.

Shri Nath announced that a new office of Directorate General of Foreign Trade will be opened at Srinagar to increase the export potential and employment generation. He further added that electronic message transfer facilities for advance authorisation and EPCG Scheme established for shipments from EDI (electronic data interchange) ports w.e.f. 1/4/2009.

While highlighting the achievement during 2004 to 2008, Shri Kamal Nath informed that India’s exports during 2003-04 was US $ 63 billion has now reached US $ 162 billion by 2007-08, recording an average annual growth rate in excess of 25%. The Minister added that for this year: “we hope to achieve a target of US $ 175 billion”. As a result of increased economic activity, the Minister said that, there is generation of about 140 lakh jobs in the export sector.

In the last 5 years, around 900 products relating to 10 sectors have been granted benefits under VKUGUJ and 100 products covering more than 10 sectors were granted benefits under the Focus Product Scheme. 763 new 100% EOUs commenced operations taking exports from Rs.23,590 crore in 2002-03 to Rs.1,61,281 crore in 2007-08 leading to employment generation of 323,755 person. In the Special Export Zones, there have been a phenomenal incremental investment of Rs.97,871 crore and direct employment provided to 231,629 persons. The exports from SEZ during 2005-06 was Rs.22,840 crore and the projected exports for the period 2008-09 would be Rs.90,000 crore, he informed.

In the last 5 years, under the Industrial Infrastructure Upgradation Scheme, 29 projects have been sanctioned throughout the country with an investment of Rs.1770 crore. Most ambitious infrastructure project is of DMIC (Delhi-Mumbai Industrial Corridor) which came with an outlay of US $ 90 billion. The project is expected to double employment, triple the industrial output and quadruple the exports from the region in 5 years.

PM panel cuts the growth forecast to 7.1%

The Prime Minister’s Economic Advisory Council (EAC) has cut the current fiscal growth forecast to 7.1% from previous projection of 7.7%. The cut in the projection is said to be due to the on going global turmoil. In 2007-08, the nation had witnessed a growth of 9 per cent. This year the growth would be lower than the previous year. The government has been taking various major steps including stimulus packages, sharp cuts in excise duties and increased plan spending to check the impact of global financial crisis.

CCEA approves revised FDI norms

Cabinet Committee of Economic Affairs (CCEA) has, in a move aimed to promote investment flow from abroad, modified the guidelines governing the calculation of foreign investments in Indian companies. The revised guideline states that the foreign investment through an investing Indian company would not be considered for calculation of indirect foreign investment in case of Indian companies which are owned and controlled by resident Indian citizens. CCEA also decided to make government approval mandatory for transferring the ownership of the Indian companies from resident Indian citizens to non-resident entities.

This change in the method of calculation would help companies like Bharti Airtel and Vodafone where foreign investments have been made through Indian companies. In the case of Bharti Airtel, Singtel holds 15.52% stake directly and another 14.4 % through a 32 % stake in Bharti Telecom, who in turn owns 45 % equity in Bharti Airtel. As per the revised norms only the direct investment (15.58%) of Singtel in Bharti Airtel would be counted as FDI and investment through Bharti Telecom would not be so counted.

This would help Bharti Airtel to get additional foreign investments if they so decide. This move is expected to benefit companies in Telecom, Aviation, Retail Marketing and Insurance sectors where there are instances of foreign investments being made through Indian entities.

Indian economy to grow at 7.1 % in 2008-09

Central Statistical Organisation (CSO) of India has projected the growth of Indian economy at 7.1% during the current financial year. This is based on the advance estimates of Gross Domestic Product (GDP) for 2008-09 which was released by CSO on 9 February. The report points to a slow down in the agriculture and industry sectors which would however be outset by a strong growth in the services sector. Industrial growth is expected to fall from 8.1 % in 2007-08 to 4.8% in 2008-09 where as agricultural sector is expected to show a drop from 4.9 % to 2.6 %, while the services sector will have only a marginal slow down from 10.9 % to 9.6 %.

The GDP growth for the first half of 2008-09 was 7.8 % (2.95 for agriculture, 6.5 % for industry and 9.8 % for services). It would emerge from this that the growth rate of economy during second half of 2008-09 would be only 6.3 % thus indicating a clear slow down in economic activity from October onwards.

New bill to tackle money laundering passed

As part of the trade facilitation measures announced by Shri Kamal Nath, Minister of Commerce and Industry, here today, the employment oriented sectors like Gems and Jewellery, diamonds and precious metals have been given a special boost. The Export Promotion Council for Gems and Jewellery and Star Trading Houses (in the Gems and Jewellery sector), besides Diamond India Limited, MSTC Limited and STCL Limited have now been added under the list of nominated agencies notified under para 4 A.4 of foreign trade policy for the purpose of import of precious metals.

Surat in Gujarat, which is home to thousands of diamond units with lakhs of diamond workers has been recognized as “Town of Export Excellence”.

 
 
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