Workshop on Export Incentives

Understanding export incentives procedure and application

FIEO in association with Vivesvaraya Industrial Trade Centre, Government of Karnataka, and the Federation of Karnataka Chamber of Commerce and Industry (FKCCI), organized a full day workshop on Export Incentives Procedure and Application in Bangalore. The workshop was aimed at educating Karnataka exporters so they are able to understand various aspects of export incentives and the changes which have been made recently. Sixty exporters participated in this workshop. Delivering his welcome address, Mr K. Shiva Shanmugam, Sr. VicePresident, FKCCI, mentioned that the Government of India is always monitoring export incentives to promote and facilitate cross border trade and keeping this on priority, the policies are being changed continuously. In his address, Mr V. Srinivasan, Joint Director, FIEO, mentioned that the growth of e-commerce creates a strong reason to use the internet. Once the advantages of claiming Indias external trade incentives online are clear, it is probable that it will become the route of choice. If it were less time consuming to claim online and the claim was made instantly then this is a powerful incentive.
A view of the audience. From right, Mr T.V. Ravi, Joint Commissioner of Bangalore Air Customs; Mr K. Shiva Shanmugam, Sr. Vice President, FKCCI; Mr J. V. Patil, Regional Jt.DGFT, Bangalore; and Mr. V. Srinivasan, Joint Director, FIEO (BLR).

In the current competitive environment, where efficiency and speed are vital, export and import orders with matching finance are hard to come by. According to the IMFs World Economic Outlook, during 2011, global exports of goods are projected to grow by 18.2%, taking annual global

export to $17.7 trillion, supported by the positive growth in global commodity prices. Growth in service exports is also forecast to rise further from $3.7 trillion in 2010 to $4.2 trillion in 2011. He also briefed about FIEOs role in export promotion. In his special address, Mr T.V. Ravi,

Joint Commissioner of Bangalore Air Customs, mentioned that the comprehensive duty drawback scheme will save lot of transaction time and cost of exporters as the benefits will be credited into the exporters bank account directly. Duty drawback delay takes place due IGM/EGM error/ nonmatching of datas.

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The Chief Guest, Mr J.V. Patil, ITS, in his inaugural address, spoke about the current economic scenario and the future targets of Indian foreign trade and also briefed about different schemes available in the Foreign Trade Policy such as Focus Market Scheme (FMS), Focus Product Scheme (FPS), Duty Exemption Scheme, Vishesh Krishi and Gram Udyog Yojna (VKGUY) etc. He advised that proper documentation will help both the revenue and commerce departments. Mr M.S. Venkatarman, Head Supply Chain Management, Pegasus Forwarding and Uthra Logistics, and his team made a presentation on various export incentives in terms of policy and procedures as listed below: 1. DUTY DRAWBACK SCHEME:

Both Sections 74 and 75 of customs exports, were discussed in terms of policy covering, AIR, brand rate, and special brand rate, and the situations leading to the same. Presentation also covered on the rate fixing modalities, etc and the various processes to be followed in case of brand rate fixing etc. 2. DUTY FREE AUTHORIZATION SCHEME: The salient features of the Duty Exemption Scheme discussed in terms of Standard Input Output Norms, value addition, who are entitled and also explained that the scheme has various process of application, utilization and redemption. 3. FMS and FPS: FMS and FPS were discussed in terms of policy

and procedure for claiming. They also gave tips on using the scheme and where to look out for the details of rates, and offered advice on application procedures. The use of scrip was also explained. 4. DEEMED EXPORTS: The nature of deemed export transactions were explained with relative incentives available for the same. During the discussions other areas of import classification were discussed and explained. Supplies to SEZs were also discussed from the point of view of the unit and the developer. During the Q&A Session, the speakers clarified various points raised by the participants. n

Need for enhancing engagement with Latin America: FIEO

A recent study by the Economic Commission for Latin America and Caribbean (ECLAC) reiterates that India could become an important trading partner of Latin America and Caribbean (LAC) region, said Mr Ramu Deora, President, FIEO. The LAC region has untapped agricultural assets and India offers a sizeable markets for Latin American agricultural produce. Noting the increasing dominance of China in the region by rapidly replacing Japan as the largest trade partner in Asia Pacific region, Mr Dora expressed concern and suggested more vigorous efforts for enhancing India's share in the LAC region. The ECLAC study noted that India is not yet a major destination for the region's exports, receiving only 0.9% of the region's total exports in 20082010 and 6.2% of those sent to the Asia-Pacific. Worse, India is not even an important source of the region's imports, supplying only 1% of the region's total imports during the same period. Mr Deora noted that it is evident from the study that India needs to diversify its trade basket with LAC and also expand the trade partners which is concentrated to a few countries led by Argentina, Brazil, Chile, Colombia, Mexico and Peru. Indian industry should take clues from the import profile of the region where India's share of medium and high-tech manufactures are much lower when compared with the import baskets of China, Japan and the Republic of Korea. Mr Deora observed that the Latin America and Caribbean region is gradually transforming into one of the major suppliers of essential raw materials, such as crude oil, edible oils, and several minerals and metal products and advised Indian companies could also consider investment route to expand economic engagement with the region. Invest should not be limited to natural resource related areas and could expand to manufacturing too. Mr Deora noted that the Government of India has been using various instruments to enhance trade with various countries including LAC and is in the process of deepening the two agreements it has in the region with MERCOSUR and Chile. However, there is the need to widen the scope of agreements to areas like services, and investment promotion not in the existing agreements but also initiate for negotiating comprehensive free trade agreements with other countries in the region. Mr Deora said that Indian exports are sailing against the wave these days with various economic indicators showing unfavorable trends and exports witnessing only 4.2% growth in November 2011. In the backdrop, adopting a diversification strategy would help to reach at least $275 billion this fiscal end.

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FIEO NEWS l January 2012