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Exporters seek dollar credit

By Our Special Correspondent

CHENNAI, JULY 15. The overriding imperative for Indian exporters to raise their scale of production to compete with China and other South East Asian countries makes it necessary to introduce policies that leave enough surplus with exporters to plough into investment and reduce transaction costs, according to Rafeeque Ahmed, President of the Federation of Indian Export Organisations (FIEO).

Amendment of the Reserve Bank of India (RBI) Act to open a "dollar window" for banks for on-lending to exporters, immediate inclusion of the service tax burden, besides the education cess, in the calculation of the duty drawback, continuation of income-tax exemption on export profits in some form or the other and tax relief for domestic tariff area units converting into export-oriented units ) and Special Economic Zone units are among major steps that the Centre should introduce to realise the targeted annual export growth of 18 per cent, Mr. Ahmed said here today.

Addressing a press conference on the Union budget 2004-05 and the imminent export-import (exim) policy, the FIEO President said foreign exchange reserves were at present being deployed by the RBI outside the country in low-yielding instruments like U.S. treasury bonds, while Indian exporters were denied foreign currency credit by banks on the ground that the banks did not have enough stock of dollars. Amendment of the RBI Act to enable deployment of reserves in the domestic banking system over a specified limit would at the same time raise the returns for the RBI.

A. Sakthivel, Chairman, FIEO-Southern Region, while welcoming the optional scheme for the textile industry in respect of CENVAT, said Chennai and Tuticorin ports should be developed to receive mother vessels and labour laws relaxed for export production.

He felt that India should offer duty-free entry for textiles on condition of reciprocity to developed countries.

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