New Delhi: A reduction in import duty on coloured gems and polished diamonds and extension in tax benefits for new SEZ units beyond March 2020 are among the steps the government may announce soon in a bid to prop up exports, according to a highly placed source.
The ministries of commerce and finance are in a dialogue over the measures to make processes easier, improve trade finance as well as competitiveness of Indian exports, the source revealed.
The government is considering cutting import duty on coloured gem stones and polished diamonds from the current 7.5 per cent.
The government may extend the deadline for removal of tax benefits to units in the special economic zones (SEZs).
In the Union Budget 2016-17, it was announced that income tax benefits to new SEZ units would be available to only those entities that commence activity before March 31, 2020.
There is also a consideration to increase the insurance coverage by the Export Credit Guarantee Corporation of India for export credit from the current 60 per cent to 90 per cent.
This would enable banks to provide more export credit at competitive rates.
To promote domestic manufacturing and cut imports, there is a plan for strict implementation of rules of origin criteria to check diversion of imports via free-trade agreement countries.
A standard operating procedure could be implemented for faster clearance of import and export consignments.
Exporters are demanding several other measures such as enhancing benefits of the Merchandise Exports from India Scheme (MEIS) for sectors like non-basmati rice and textiles, besides interest subvention for large pharmaceutical companies.
“Because exports are passing through tough times amidst global contraction in demand due to economic uncertainties, support measures for exporters would help in imparting further competitiveness to it,” Federation of Indian Export Organisations (FIEO) Director-General Ajay Sahai said.
S C Ralhan, president of the Ludhiana-based Hand Tools Association, said refund of indirect taxes such as on oil and power, and state levies such as mandi tax would help in dealing with liquidity issue.
India’s exports have recorded 2.25 per cent growth in July. Cumulatively during April-July this fiscal, the exports dipped by 0.37 per cent to USD 107.41 billion