Coir exports exceed target set for 2010-11

ON the back of escalating shipments to China, coir exports from India, valued at Rs 807 crore, have gone past the target set for the 2010-11 fiscal.

According to sources in the Coir Board, India exported coir valued at around Rs 807 crore in 2010-11 compared to the set target of Rs 800 crore, primarily due to increased exports to China.

Sources said that although shipments to China surged, there was a decline in exports to the US, the biggest market for the product from India for long. This is the second consecutive year that coir exports have crossed the target.

Cardamom exports may get a fillip due to dip in prices

Cardamom exports may get a fillip due to dip in prices

TRADERS and farmers are ill at ease due to the sudden decline in prices of cardamom in the ongoing lean season.

Following a high of Rs 1,500 per kg in the last two years, cardamom prices have been hovering between Rs 750 and Rs 800 per kg. Nonetheless, experts feel the low prices could boost exports.

Prices were lingering close to Rs 1,000 per kg some time back, but due to heavy supplies during the May lean season they plunged to around Rs 700 recently.

Mr P. C. Punnoose, General Manager, Kerala Cardamom Processing and Marketing Cooperative Society, blames the price fall on the early monsoon, which he feels has helped in boosting supply in the lean season.

"The new harvest season, which usually starts in July, may be advanced to June, resulting in low prices in the next few weeks," he contends.

In May last year, cardamom prices were hovering around Rs 1,100 per kg, subsequently climbing to Rs 1,500, before stabilising around Rs 1,000 per kg.

Keep fingers crossed on DEPB, Khullar tells exporters

EXPORTERS have been asked by the Commerce Ministry to "keep their fingers crossed" on their demand for extension of the duty entitlement pass book (DEPB), a tax neutralisation scheme on exports, beyond June 30.

Exporters have begun pressing their case with both the Commerce and Finance Ministries for continuation of the sops after the Revenue Department made it clear that the DEPB window would close from next month-end.

The Chairman of CII's National Committee on Exports, Mr Sanjay Budhia, pointed out that exporters across different sectors were worried as no alternative scheme was being offered in place of the DEPB.

According to an official, the Commerce Secretary, Dr Rahul Khullar, advised representatives of business chambers and export promotion councils, who called on him, to "keep their fingers crossed" as it was up to the Revenue Department to take the final call on the
issue.

Sharma to pitch for interest relief to exporters

IN order to make cheaper funds available, the Commerce Department will soon put in a request to the Finance Ministry to reintroduce interest rate subvention or discount scheme for certain category of exporters.

A Commerce Department official stressed that cost of funds should come down for exporters in order to encourage them to make investments, produce more and stay competitive.

The Commerce Minister, Mr Anand Sharma, may take up the matter with the Finance Minister, Mr Pranab Mukherjee, later this month. It may be recalled that the government gave a 2 per cent discount to eight export sectors two years ago to help them compete better after demand plunged in the developed world due to the financial crisis. The scheme lapsed in the closing stages of the last fiscal when exports grew by an inpressive 37.6 per cent.

Industry sources say that this rapid pace may not be possible to sustain owing to the rising cost of credit.

According to Fieo chief, Mr Ramu S. Deora, the cost of funds for exporters has increased by more than half over the last one year, affecting competitiveness, while interest rate on export credit climbed to 10.75 per cent from 9 per cent in April 2010.

He says that if one takes into account the two per cent subvention given by the government till March 31, the net increase in the cost of funds over a period of 13 months for exporters works out to 53.6 per cent.

Mr K.T. Chacko, Director, Indian Institute of Foreign Trade, points out that exporters in China and other significant developing countries have access to credit at much lower rates than in India.

The facility of interest subvention was available to sectors like handicrafts, carpets, handlooms, small and medium enterprises, leather, jute manufacturing, engineering goods and textiles. Under the scheme, banks would pass on the subvention to exporters and later claim the same from the Centre.

However, taking into account the country's strong growth at present, the Finance Ministry is not too keen on doling out export sops.

Fieo submits new Budget wish-list in face of rising exports

Worried that the Union government may unwind the stimulus measures granted to the export sector in the wake of rising foreign trade, the Federation of Indian Export Organisations (Fieo) Director-General, Mr Ajay Sahai, has submitted a fresh Budget wish-list for the Finance Ministry's consideration. Some of the major points are:

• A turnover tax on exports in place of income-tax. The turnover tax will simplify the tax procedure and reduce the administrative burden on exporters. This tax can be collected at 0.25 per cent on all remittances received from abroad, thus plugging any leakage and reducing the cost of collection.
• Investment-linked incentives for micro, small and medium enterprises (MSMEs) in the export sector. To increase investment in manufacturing, MSME export sectors be given tax concession on investment in capital and machinery.
• Extension of tax holiday by three years for export-oriented units and units in software technology parks.
• Exemption from service tax on all output services for exports.
• Service tax exemption to all export promotion councils.
• The rate of depreciation on old machinery should be increased from 15 per cent to 25 per cent to encourage purchase of new machinery.
• Credit for exporters at a flat rate of six per cent.
• Extension of interest subsidy scheme till March 31, 2013, in case providing export credit at 6 per cent is not feasible.
• Foreign currency credit at the earlier rate of LIBOR plus 100 basis points. (Following the financial crisis, this rate was increased to LIBOR plus 350 basis points).
• Rectification of inverted duties structure in silk and synthetic fibre.

Notification for cash rebate of accumulated Cenvat credit on account of reduction in excise duty.