This demand was raised at a meeting with the Director General of Foreign Trade (DGFT) NL Lakhanpal in Mumbai. Gold and silver had been deleted from the SIL list once these two were canalised through banks.

The move had brought down the premium of SILs which are issued to recognised export houses against their respective export performances. These licences can then be traded at a premium or used for effecting imports of items allowed under the scheme.

However, since the precious metals have been removed from the SIL list, the premium on SILs have come down drastically. Besides the two precious metals, the Fieo members are also demanding inclusion of 17 other items for import under SILs.

These are concentrates of alcoholicbeverages, wines (tonic or medicated), saffron, all types of penicillin, tetracycline and oxytetracycline and their salts, streptomycin, rifampicin, vitamin B1, B2 and their salts, copper oxychloride, dimethyl sulphate, perfumery compounds and synthetic essential oils, aircraft and helicopters, ships, trawlers, boats and other water transport crafts, natural rubber, crude palm stearin and raw silk.

The proposal claims that though the government has included variety of items for import under SIL, "those items are unlikely to raise the premium on SIL and therefore the lucrative items should be considered".

In order to make the imports through SIL route attractive, the proposal also suggested that star and super star trading houses should be considered as nodal agencies for import of gold and silver, surrender of SILs of appropriate amount be accepted in fulfillment of export obligation in respect of goods imported under the EPCG scheme.

The proposal asks the government to include specified categories ofexporting firms and allow them 50 per cent of the licence value of SIL for importing the required raw materials duty-free for export production. All these suggestions are aimed at raising the premium of SIL so that the exporters who are entitled to SILs can benefit.

Though the government is still examining the suggestions, the customs department opposes its implementation as it would encourage the exporters to commit frauds for gaining more SILs.

Even a section within the DGFT is averse to the suggestion as it may defeat the purpose of protecting the domestic industry and only a select group of SIL holders will benefit from it.