The finance ministry is considering a suggestion by the commerce ministry to enhance duty neutralisation rates to make up for revenue lost by exporters due to sharp appreciation in the rupee.
Commerce secretary GK Pillai has informed us that serious discussions would be initiated with finance ministry and RBI for enhancing the DEPB and drawback rates to 4-5%, Federation of Indian Export Organisations (FIEO) president Ganesh K Guta said here.
Another proposal to compensate exporters in the backdrop of a fluctuating currency is that they may be paid interest on their export earners foreign currency account at par with what the foreign currency non-resident account holders get.
On Thursday, textile minister Shankarsinh Vaghela had told exporters in Tirupur that the finance ministry was considering increasing the duty drawback rates and reducing the interest rate on export credit as a relief to the exporting community.
Gupta said commerce and industry minister Kamal Nath has convened a meeting with exporters on June 13 to review the situation. The FIEO president said he has warned the government that the much touted export target of 160 billion dollars for this year would not be met if immediate steps were not taken to neutralise rupee impact on exporters. A severe impact will be visible on the exports by July-August. The worst hit sectors are handicrafts, textile, leather, gems and jewellery and chemicals and most of these are employment intensive, he said.