India Inc seeks restoration of drawback rates
Commerce Secretary S R Rao said improvement in western markets have helped in pushing the exports. “Exports have shown a significant increase and imports fell significantly…All the regions are doing well. We see no concerns. Only South Asia and Latin America are marginally low,” Rao added.
In April-October, exports grew by 6.32% to $179.38 bn, while imports during the period contracted by 3.8% to $270.06 bn. Rao expressed confidence that the country would achieve the $325 bn target for the current fiscal.
“All the major sectors (engineering, textiles and gems and jewellery) having significant contribution have shown a positive growth trend,” he added. Engineering exports grew by 36% to $5.6 bn in October.
Rao said that gold and silver imports in October grew due to the clearing of air on a RBI norm for gold imports.
The RBI’s 80:20 scheme for gold imports had left many confused, leading to imports being held up at customs. Gold and silver imports increased to $1.3 bn in the month under review from $0.8 bn in September, 2013.
Reacting to the export numbers, India Inc urged the Government to restore duty drawback rates to bring down the trade deficit. “CII strongly recommends restoration of Duty Drawback Rates which have been reduced drastically last month. This will further help in gaining and maintaining India’s share in the global market,” Sanjay Budhia, Chairman, National Committee on Exports and Imports of CII saidsaid.
Duty drawback is the refund of duties on inputs imported for export items.
The government had recently rationalised the duty drawback and brought more items under the scheme for tax refund to exporters. It had reduced the rates for different engineering items.
Trade deficit jumps to $10.55 bn
Meanwhile, the government data showed that the country’s trade deficit rose to $10.55 bn in October after narrowing to two-and-a-half-year low of $6.7 bn in the previous month as purchases of gold and silver picked up ahead of the festive season.
The value of gold imports jumped to $1.37 bn in October as compared to $800 mn in the previous month.
“Curbs on gold and silver imports have worked,” Rao said adding there were positive trend in India’s foreign trade as exports growth was consistent.
Cumulative trade deficit for April-October period of the current financial year is recorded at $90.68 billion, sharply lower than $112.03 billion registered in the corresponding period of last year.