Saturday, August 29, 2009


Saturday, 29 August 2009

New Delhi : "The Policy is progressive and gives a clear direction to the nation's export drive at a time when the global markets are floundering," stated J.S. Chopra, President of The Automotive Component Manufacturers Association of India (ACMA) welcoming the new Foreign Trade Policy.

The extension of the DEPB scheme by one more year is a welcome step and was expected. However, this extension should have been for a longer period of 3-4 years to provide an element of stability in the policy which is critical for servicing medium to long-term export contracts. The extension of the Income 'lax Benefit under Section 10B for EOU till 2011 is also a welcome step and was a specific recommendation of ACMA. The reduction in Duty for import of capital goods to zero under EPCG will also help in creation of incremental export oriented capacity in the country, which had tapered off during the last few months and is now beginning to show signs of revival as the world economy begins to recover.

The increase in the incentive from 2.5% to 3% under the Focus Market Scheme and from 1.25% to 2% under Market Linked Focus Product Scheme for auto-components are also welcome steps and will also assist the industry in enhancing their relative export competitiveness vis-a-vis other competing countries to some extent. The expansion of the scheme to countries like Algeria, Egypt, Kenya, Mexico, Nigeria, Tanzania, Ukraine, Australia, New Zealand, Cambodia and Vietnam will also help the auto- component industry in tapping new growth markets in view of the flagging exports in the traditional markets.However, the scheme includes only 15 auto-component tariff lines at present. ACMA's suggestion to include all auto-component tariff lines under this scheme has not been agreed to, which is a disappointment.

The policy also makes efforts to encourage deeper involvement of the State Governments to the National Export movement. The scheme of Assistance to State for Infrastructure Development of Exports has been modified and the purposes for which the State Governments could utilize the Funds under this Scheme for creating export linked infrastructure has been expanded. We hope that this will help in making exports a truly National Movement rather than just a Centre driven priority", said Mr. Chopra.

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