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Govt to merge DEPB, DBK

DEPB to continue till 2005

E-Tex Staff - Mumbai

The Director General of Foreign Trade, Mr L Mansingh, has announced that the Duty-Entitlement Passbook (DEPB) scheme will continue at least till 2005, putting to rest all confusion and apprehensions about the continuance or otherwise of the scheme.

Speaking at a recent interactive meeting organised by the Synthetic and Rayon Textiles Export Promotion Council (SRTEPC), in Mumbai, Mr Manshingh said, “The government has no plans to dismantle the DEPB scheme, at least till 2005. Moreover, the DEPB and drawback schemes will be merged, to give the exporters better rates, and coverage.” He further stated that the main issue of discontent at the WTO against the scheme was that there is no system for verifying the extent of duty neutralisation under the scheme.

He said that trade investigations such as anti-dumping, anti-subsidy, against Indian exports have increased, because India’s share of world markets is increasing. “With increasing shares, such actions are bound to happen. In fact, we should take this as a compliment to our strength, that Indian exports are making a mark in the global market, despite the numerous obstacles faced by the industry.”

He informed that the target of one per cent of world trade share by 2007 was achievable. “Last year, export growth was 20 per cent, which cut across all sectors. And our share of world trade has gone up to 0.8 per cent from 0.6 per cent,” he said.

He said that the textile export target of US$ 25 billion by 2010 was on the lower side, and with the right strategies by the industry and government, the target could well be surpassed. “Tirupur, a very small textile cluster, has shown remarkable performance in the last couple of years. The town is now implementing a Rs 1,000 crore project for creating water supply facilities, and a number of other projects have been taken up for infrastructure development. The Tirupur industry is now asking the government for support in building the ‘India Brand’. The industry must learn from such experiences, and work proactively,” he said.

Speaking on the occasion, Mr Rakesh Mehra, chairman, SRTEPC said that the appreciating rupee was hurting Indian exports, and even as measures for rupee depreciation will not find favour with exchange managers, the government must address the obstacles faced by exporters, so the targets set by the industry can be met. “The DEPB is expected to go, and the ALS exists, but the government still needs to come up with WTO compliant devices to take care of other costs and levies such as octroi, sales tax, etc. Even as interest rates in India are higher than international rates, and the option of availing foreign loans does exist, in reality these are not easily available, and certainly not possible for the small exporters. Export credit, post-shipment credit rates also need to be brought down to realistic levels,” said Mr Mehra. He further stated that CENVAT introduction was a good step, but is burdening exporters with claiming input credit which is accumulating with the authorities. “And this is not a fast process. Similarly, nothing has been done yet on the brand rate issue.”

A number of issues were discussed at the meeting, including exclusion of certain costs under input-output norms, inefficiency of the EDI system, penalisation of value-addition under the input-output norms, and a number of issues related to advance licences, etc.