New Delhi, March 31: The Export Import (Exim) Policy for 2003-04 unveiled today in the backdrop of the Gulf War aims to expand India’s export basket by focusing on the export of services like healthcare, entertainment, education, tourism, and software.
To make up for possible loss of export earnings to the war-torn Gulf region, the policy calls for a new trade focus on the former Soviet Union countries, with which India had transactions worth $ 4.5 billion about 12 years back before the collapse of the Union. That has now tumbled to a level of just $ 1.5 billion.
The thrust on services — which today accounts for over 48 per cent of the GDP — and the attempt to re-establish ties with the CIS nations is designed to ratchet up exports, which is expected to cross the $ 50-billion mark this year.
Commerce and industry minister Arun Jaitley, who unveiled the Exim policy, has set a target of 12 per cent export growth in the coming fiscal. The broad objective is to help India achieve 1 per cent share of the world merchandise trade by 2007.
The minister said, “We have to recognise that with the possible exception of the software sector, we have not even made a beginning (in export of services). The new exim policy, therefore, aims to give a major boost to the export of healthcare services by allowing the duty-free import of consumables, office and professional equipment, spares and furniture up to 10 per cent of the average foreign exchange earnings in the previous three years or a bank guarantee in lieu of this for new enterprises.”
The Exim Policy has introduced a host of incentives to boost export of automobile components and pharmaceutical products besides traditional foreign exchange grossers like gems and jewellery, and textiles.
It has also identified the farm sector as an area of core competence which will receive “special treatment” as will special economic zones (SEZs). It also announced that sales from the rest of the country to SEZs will be treated as exports and be eligible for sops paid to normal exports.
The government has removed quantitative restrictions on import of 69 items covering animal products, vegetables, spices, antibiotics and films, in consonance with its WTO commitments.
It also removed from the restricted list the export of five items including rice, cotton linters, rare earth and silk cocoons.
To leverage the country's strength in entertainment services, the policy proposes to promote through suitable tax incentives contributions to venture capital funds which will provide finance to this sector which spans films, studio services, animation graphics, television and radio programming. Discussions are on with the finance ministry on the issue, he added.
The policy aims to give a further thrust to the agri-export processing zones (AEZs) and special export promoting zones in order to make the country's exports more competitive. The minister said that while the states had responded well to the AEZ scheme, there was a dearth of resources for setting up state-of-the-art infrastructure.
The new policy proposes to associate corporates with proven credentials to develop AEZs for boosting agri exports.
Another major initiative to boost agri and allied products exports will be the modification of DEPB rates to take into account inputs such as fertilisers, pesticides, and certified seeds used by farmers. Farmers can now import duty free inputs if they plan to export their produce. This will also apply to contract farmers.