The areas where cost reduction is expected include bank interest charges, demurrage charges at ports, transit of export goods, etc.

However, pollution control schemes do not constitute a subsidy and therefore are encouraged. Leather sector is a case in point. The cost of installation of pollution control equipment is borne to the extent of 50 per cent each by the central and the state governments and the remaining by the exporters.

The extent of additional cost to be borne by exporters can be gauged from the fact that demurrage charges to the extent of about Rs 15 crore had to be paid tothe Vizag and Murmugao ports on export of iron ore due to the strike there.

There are definite indications that the hundred per cent tax deduction in export profits under Section 80-HHC of the Income-Tax Act, 1961 will in all probability not be disturbed. This is perhaps the only worthwhile incentive available to exporters since the start of the reforms in 1991.

Similarly, the five-year tax holiday in a block of period of 8 years available to hundred per cent EoUs and units set up in the export processing zones (EPZs) is also expected to continue. EoUs and EPZs have been pleading that the benefit be made available during the entire period of their operations.

In fact, the commerce ministry in the face of representations from the exporting community and the Confederation of Export Units has already taken up the continuation of the above benefits with the finance ministry.

The commerce ministry is also taking up strongly with the finance ministry the question of giving effect to the modified exim policyprovision that had sought to raise the depreciation limit for EoUs from 70 to 90 per cent over a period of five years.

The increase conceded by the Central Board of Excise and Customs through a recent notification is a measly 5 per cent, which has fallen far short of the expectations of the EoUs.