The Hindu : Curbs on gold, silver imports removed

Online edition of India's National Newspaper
Thursday, Jan 29, 2004

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Curbs on gold, silver imports removed

By Sushma Ramachandran

NEW DELHI, JAN. 28. In a mini-version of the Exim policy, the Government today announced a series of measures to boost export growth. This included launching a gold card scheme for creditworthy exporters, removing curbs on gold and silver imports, allowing duty-free fuel imports for the manufacturing sector and making capital goods imports easier for the services sector.

The facility of duty-free alcohol imports is being extended to heritage hotels, one- and two-star hotels and restaurants while the ceiling on gifts being sent abroad has been raised from Rs. 1 lakh to Rs. 5 lakhs.

Steps have also been taken to reduce the risk for exporters by raising the equity base of the Export Credit Guarantee Corporation (ECGC) from Rs. 500 crores to Rs. 800 crores and creating a National Export Insurance Account for ECGC to underwrite high-value projects implemented abroad.

Outlining these decisions, the Commerce and Industry Minister, Arun Jaitley, said the measures had been taken in view of the "challenging" situation on the export front this year, especially a hardening rupee. Though export growth had shown a phenomenal spurt of 42.68 per cent in December, he argued that it would not be possible to wait until after the elections to provide incentives as exporters needed to maintain competitiveness in the global economy. The Election Commission's model code of conduct would be in effect during March, when the Exim policy was usually presented. While long-term issues would thus be left for the next government's Exim policy, some "facilitation measures' in relation to last year's policy were being provided to give relief to the exporting community in the interim period.

On the removal of curbs on gold and silver imports, he said that imports would no longer have to be canalised through public sector agencies, easing supply for the gem and jewellery industry. The country was turning into a "jewellery hub," and the sector accounted for a big chunk of the export basket. With the country's buoyant foreign exchange reserves, it was possible to offer this facility. The ceilings on import of global positioning receivers, electrical energy and air guns have also been lifted while export of fertilizers has been liberalised.

The Minister was speaking at a function to launch the digital signature and electronic fund transfer facility to enable exporters to submit online import and export applications in the offices of the Directorate General of Foreign Trade (DGFT).

On the gold card scheme, he said it was being finalised by the Reserve Bank for creditworthy exporters with a good track record. This would enable them to obtain export credit without difficulty. Detailing the "promotional measures" for export-related infrastructure, he said the rupee payments for port-handling services would be counted for discharge of export obligation under the EPCG (Export Promotion Capital Goods) scheme. Due to demands from the service industry, duty-free import of all kinds of capital goods, including office and professional equipment, is being allowed.

Besides, to offset the high power costs faced by the manufacturing industry, duty-free fuel imports will be allowed. In addition, the ceiling on the import of prototypes has been lifted to help research and development activity.

Mr. Jaitley clarified that duty-free alcohol imports to hotels was being allowed on the condition that the benefit was passed on to the consumers. Procedural bottlenecks relating to deemed export benefits have been removed, and the facility is being extended to fertilizer and refinery projects. To reduce the transaction costs, the fixing of drawback brand rates for deemed exports has been decentralised to DGFT regional offices. The EPCG scheme is being simplified by allowing capital goods imports based only on chartered engineers certificate and permitting the export of alternate products and services by group companies for discharging export obligations.

Highlights

Curbs on gold, silver imports lifted.

Gold card scheme to give easy bank credit to exporters with good track record.

Manufacturing companies can import duty free fuel

Duty free import of office and professional equipment for services sector.

Heritage hotels, small hotels and restaurants can import duty free alcohol.

E-commerce initiatives introduced.

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