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Duty drawback rates may be hiked to help exporters
June, 09th 2007

The finance ministry is considering a suggestion by the commerce ministry to enhance duty neutralisation rates to make up for the 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 the finance ministry and the RBI for enhancing the duty entitlement passbook scheme (DEPB) and drawback rates to 4-5 per cent, Federation of Indian Export Organisation (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 on a par with what the foreign currency non-resident account holders get.
 
Gupta said Commerce and Industry Minister Kamal Nath had convened a meeting with exporters on June 13 to review the situation.
 
The FIEO president said he had warned the government that the much touted export target of $160 billion for this year would not be met if immediate steps were not taken to neutralise the 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, he said.

 
 
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