In a strong bid to create export consciousness among the States for realising India's full export potential, Shri Maran announced that the government had decided to allocate Rs.250 crores in the supplementary budget for this year for the scheme to involve the State governments in the national export effort and said that the quantum of funds for this scheme would be stepped up in the coming years. Details of this scheme would be announced shortly, Shri Maran added. He highlighted in particular the export potential for states like Gujarat, Punjab, Kerala, Tamil Nadu, West Bengal and others and said that under the scheme, the States would be empowered with the required resources, flexibility and initiatives in decision making to make their rightful contribution to the export effort. The Minister further said, he would request the State governments to declare units exporting more than 50% of the turnover as public utility services to enable them to meet their global export commitments.

    In a major effort to rationalise the existing export promotion schemes and to improve availability of inputs or raw material for exports, the government has decided to introduce a post-export duty-free replenishment scheme for over 5000 export products. Under this scheme, after the completion of exports, the exporters would be able to obtain transferable duty-free replenishment certificates for importing inputs used in export products as per the standard input-output norms. The Export Promotion Capital Goods (EPCG) Scheme would be extended uniformly to all sectors and to all capital goods without any threshold limit on payment of 5% customs duty, while the 10% countervailing duty on imports under EPCG stands withdrawn. "The changes in the EPCG scheme will particularly benefit the small scale units because earlier they could import capital goods under this scheme only on payment of 10% duty", the Minister said. The actual user, non-transferable Advance Licence for physical exports and for intermediate supply for exports would be exempted payment from all kinds of duty like basic customs duty, countervailing duty, anti-dumping and safeguard duty.

    The post-export Duty Entitlement Pass Book (DEPB) would continue till 31/3/2002, i.e., by 2002, the DEPB scheme would be subsumed into the Drawback Scheme. The threshold limit of Rs.20 crores for fixing new DEPB rates stands removed, thereby making DEPB more accessible. For all products, DEPB rates of 15% or more value caps would be prescribed, but value caps would not apply to products being exported under brand names approved by an Inter-Ministerial Committee. However, pre-export DEPB scheme would be abolished as very few exporters were using this scheme.

    The Minister also announced a series of sector-specific initiatives to boost exports of gems & jewellery; drugs & pharmaceuticals; agro-chemicals & bio-technology exports; leather; handicrafts; garments; silk; granites & minerals. These include (a) introduction of a Diamond Dollar Account (DDA) Scheme which would go a long way in developing India as a major trading centre for diamonds. Under this scheme, export proceeds would be retained in dollar account, allowing such DDA holders to utilise such funds for import of rough diamonds and for purchase of rough diamonds or cut & polished diamonds from another DDA holder; (b) Exporters have been extended the facility of exporting jewellery by speed post; (c) For encouraging exports in knowledge-intensive sectors like pharmaceuticals, agro-chemicals and bio-technology, these sectors would be allowed to import laboratory equipment, chemicals etc, for R&D purposes upto 1% of the FoB value of exports duty-free; (d) Duty-free import of trimmings, embellishments and other items increased from 2% to 3% of FoB value of exports for leather, handicrafts and garments; (e) Pre-export inspection of silk products by Central Silk Board discontinued; (f) Export-Oriented Units (EOUs) engaged in export of granites, marble and other mineral products permitted to move capital goods outside the manufacturing premises for the purpose of excavation; (g) All EOU/EPZ units would be allowed to carry job works in DTA units in all sectors -- a facility available earlier only for agriculture, marine and garment sectors; and (h) Project exporters/construction companies/service providers with domestic turnover of more than Rs.100 crores allowed to apply for international service house status on signing of MOU with DGFT, undertaking to achieve exports of Rs.15 crores annually for the next three years -- with a view to enabling such companies to participate effectively in overseas construction projects.

    Deemed export benefits have been made uniform for all sectors. Deemed export benefits have been extended to supplies made to projects funded by UN agencies and also extended to power sector even for the modernisation and renovation of power plants.

    Responding to representations from information technology and other service sectors to do away with customs bonding, Shri Maran informed that necessary amendments in this regard would be issued shortly. The Minister announced the setting up of a small Group to quickly look into various policy and procedural changes that were required to be introduced in the various departments of the government so as to step up the growth of hardware electronics. In this context, he remarked that the recent phenomenon of the growth of software exports has been due to, apart from India's talent and knowledge in high-tech, 'hands off' policy of the government towards the sector…. The issue is why not a similar approach to hardware electronics".

    It was also decided to give double weightage to exports from Jammu & Kashmir for determining entitlement for status certificates -- a facility already available for the exports from the North East. Further, in keeping with the importance attached by the government to the development of the border areas, it had been decided that apart from barter trade at the land customs check post at Moreh on the Indo-Burmese border, normal imports and exports on payment of applicable duties would also be permitted. Shri Omar Abdullah and Dr. Raman Singh, Ministers of State for Commerce & Industry were present at the press conference, along with Shri P.P. Prabhu, Commerce Secretary and Shri N.L. Lakhanpal, DGFT.

    Underlining that "at the dawn of the 21^st century, we cannot continue with the communication modes of the 19^th and 20^th centuries", Shri Maran said that during the course of this year, electronic filing of applications would become the norm. Already electronic filing of applications had been introduced in 6 major offices of DGFT, Shri Maran said adding that he directed that applications filed in electronically should in the normal course be delivered in 24 hours and definitely within 48 hours. Applications fee for electronically filed applications was proposed to be reduced so as to encourage exporters to get on to the electronic mode. For all status holders and Green Card Holder, electronic filing of applications would become mandatory with effect from 1/7/2000, the Minister said.

    Quantitative Restrictions (QRs) in respect of 714 items will be withdrawn with effect from 1/4/2000. The Minister underlined that tariff line-wise import policy was first announced on 31/3/1996 and at that time itself 6161 tariff lines were made free. Since then 1905 tariff lines had been freed till now. Further, the QRs in respect of the existing 1429 tariff lines were withdrawn preferentially for imports on SAARC countries with effect from 1^st August, 1998 itself. Asserting that the scrapping of QRs would not hurt Indian industry and the doubts and apprehensions in some quarters on this score were exaggerated, Shri Maran pointed out that enough safeguards to protect the domestic industry were in place. Thus, tariff protection would continue to be available. Further, in the event of unfair trade practices such as dumping or subsidisation of exports by other countries causing injuries to Indian industry, adequate protection under anti-dumping and anti-subsidy mechanism as well as protection under safeguard provisions in the event of surge in imports would always be available. Shri Maran also indicated that the Tariff Commission would have to be strengthened to make it a useful and purposeful organisation. This is important, Shri Maran said, as "an institutional mechanism will have to be evolved to study, analyse and recommend appropriate tariff structure to maintain balance between the interests of producers and users/consumers".

    Regarding Special Import Licence (SIL), it was mentioned that the SIL list would be abolished after 1/4/2001 and the grant of SIL would be discontinued after 31/3/2000. In respect of exports/ supplies effected upto 31/3/2000, SILs with a validity period upto 31/3/2001 would be issued immediately on request without waiting realisation of export proceeds.

    Referring to a large number of representation seeking resolution of past issues, Shri Maran assured that he had discussed these issues with the Finance Minister and hoped to issue the final orders in all these case in the next three months.

    Concluding his address, Shri Maran said: "The Exim Policy is only a small but an important beginning of the overall government strategy to bring about a special focus on export for creation of employment and to achieve high economic growth".