Govt may soon announce measures to boost exports; tax benefits to units in SEZ likely to get extension

New Delhi: The government is expected to soon announce measures for certain sectors, including gems and jewellery, to boost the country’s subdued exports, an official said. Finance and commerce ministries have held several round of talks on these measures, the official said. As part of a proposal that is under consideration, 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 31 March, 2020. For the labour-intensive gems and jewellery sector, the government is looking at cutting import duty on coloured gemstones and polished diamonds from the current 7.5 percent. [caption id=“attachment_1986167” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] 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 percent to 90 percent. 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 percent growth in July. Cumulatively during April-July this fiscal, the exports dipped by 0.37 percent to $107.41 billion.