NEW DELHI, April 13: Dealing a ideological blow to the proponents of `swadeshi' brigade within the ruling coalition, Commerce Minister Ramakrishna Hegde today liberalised imports of a whole range of consumer goods and announced a major package of incentives for exporters. In keeping with India's commitment to the World Trade Organisation, Hegde has removed 326 items like canned juices, shaving creams, toilet soaps, and `bindis', to name just a few, from the restricted list of imports. These can now be imported freely, without applying for a specific licence.The thrust of the modified Exim Policy (1997-2002), apart from cutting procedural bottlenecks for exporters, is to facilitate duty-free imports for small-scale exporters. Thus, the minimum threshold limit of Rs 20 crore for duty-free imports of capital goods under the Export Promotion Capital Goods (EPCG) scheme has been slashed dramatically to Rs 1 crore, putting it well within the reach of a large number of exporters.
Similarly, units whichexport Rs 1 crore worth of agricultural and related goods can now qualify for duty-free imports of capital goods -- earlier, this was Rs 5 crore. For software exports, this limit has further been brought down to Rs 10 lakh. In order to cut red-tape, and give the message of export-at-any-cost, Hegde has also decided to do away with the concept of a minimum value-addition of 33 per cent on duty-free imports against advance licences. In other words, exporters who got advance licences for duty free imports of, say, Rs 100 of components, had to export goods worth at least Rs 133. This, Hegde argued, caused a lot of bureaucratic delays in terms of value-addition norms.
So, now, as long as the exports are higher than the imports, it's all right. This, Hegde explained, was part of the move towards a `trust-based' system.
Issuing of licences such as the advance licence for export houses/trading houses has also been simplified. These exporters, who account for around 70 per cent of the country's total, will nowget their licences automatically. Any problems, such as non-fulfillment of earlier export obligations, will be dealt with later. Other licensing functions are also to be decentralised, some of these to the offices at various ports.
Relaxations have also been made in the current EPCG scheme under which exporters have to export only goods manufactured by using the capital goods imported by them. With an enhanced export obligation of 50 per cent, this has now been relaxed.
Hegde also announced that he was in favour of setting up a separate ministry for infrastructure, so that this genre of problems of exporters could be taken care of.
Pharmaceutical companies are now to be allowed to export free samples as is the practice overseas, and the garments sector will be allowed to import trimmings as part of personal baggage. Gold jewellry exporters are to be given duty-drawback, to help improve profitability.
Policy highlights
326 goods, including several consumer goods, can now be importedfreely
Minimum export limits for duty-free import schemes slashed dramatically -- from Rs 20 crore earlier, to Rs 1 crore now
New anti-dumping directorate set up
5 per cent customs duty on exports to be neutralised
Licensing decentralised, to be made automatic for export houses
Private bonded warehouses to be allowed
Threshold limits for export houses fixed at Rs 12.5 crore, as against the Rs 20 crore prescribed in the Exim Policy 1997-2002
Wastage and value-addition norms for jewellry units relaxed to boost exports.The fineprint for the consumers
Even though the government has allowed unrestricted import of many consumer items, importers will continue to pay the customs duty announced in the previous budget. The only benefit for the consumer/importer is that one doesn't need to run to the government for licence as these items have been brought under open general licence. Even if one imports these items under OGL, the prices will remain thesame but the advantage is that there will be more freedom to get these items available in India.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
