Alt tag (for Murasoli Maran’s image): Commerce Minister Maran has already hinted at sops for Special Economic Zones Short headline: Export to be focus
of new Exim Policy New Delhi: The five-year Exim Policy, to be unveiled on March 31, will shift the strategy from import liberalisation to export orientation, with specific focus on sectoral and cottage exports and Special Economic Zones (SEZs), which would be made hassle-free through simplification of rules.

The first after dismantling of quantitative restrictions last year, the Exim Policy may not have major new initiatives but will simplify rules to make exports an engine of growth.

The policy was gradually losing its relevance with trade being decontrolled in a phased manner. But a prolonged transition had made the continuation of the policy crucial to give a new direction to exports and double it to $ 80 billion in the next five years, official sources said.

Co-terminus with the 10th Five Year Plan, the 2002-07 policy will have measures to implement the roadmap laid in the medium term export strategy to achieve 12 per cent average growth rate by facilitating states to increase their role in exports.

Several tax sops are likely in the policy to promote SEZs, agri-export zones, industrial clusters, besides continuing with export incentives like duty drawback and Duty Entitlement Passbook scheme. But their rates would be rationalised with lowering of customs duty in the Budget.

SEZs are likely to get several sops as already indicated by the Commerce Minister Murasoli Maran earlier this month. While a comprehensive legislation for these zones is in the pipeline, the sops likely to be announced in the Exim Policy could include income tax and service tax breaks.

Also likely is permission to allow setting up of off-shore banking units in the SEZs and giving deemed export status to goods sold by the Domestic Tariff Areas to SEZs.

The policy is also likely to include setting up of a dedicated fund to boost exports of certain items including drugs and pharmaceuticals, engineering goods and textiles to African countries on the lines of the 'Focus: Latin American Countries’ (LAC), announced in 1997.

The high-level Exim policy committee headed by P P Prabhu, former Commerce Secretary, has made a number of sectoral recommendations, many of which are expected to be incorporated in the Exim policy.

The 12-member committee, which has favoured removal of all restrictions on movement, storage and export of agricultural products has also mooted a rate of three per cent under the duty entitlement passbook scheme to encourage exports in retail packaging.

To boost exports of processed marine products, floriculture and horticulture products, it has proposed substantial investment in the sector and marketing tie-up with some major overseas distribution and marketing chains.

To give a further push to Agri Export Zones (AEZ) the committee has also suggested that processors and exporters in these zones be permitted to avail duty neutralisation schemes.

It has also suggested that the facility of credit entitlement given to farmers should also be extended to the processors and exporters of these AEZs.

PTI