New Delhi: In a bid to provide relief to exporters hit by rupee appreciation, the government today announced a Rs1,400 crore package that includes increased rates of duty drawback with effect from 1 April 2007.
The increased rate of duty drawback on nearly all products would cost the exchequer Rs800 crore while the government would bear another Rs600 crore to provide two percentage point subvention to banks for providing concessional credit to exporters in certain sectors.
“The drawback rates have undergone significant changes in line with changes in the prices of inputs and duties. The rates have been revised upward on nearly all products,” finance secretary D Subbarao told reporters here.
Giving an example, finance ministry officials said, the new drawback rate for knitted shirts will now be 10% with the cap of Rs48 per piece as against the existing 7% with a cap of Rs31 per piece.
The finance ministry officials also announced measures for exporters in textile, ready made garment, leather exports, handicraft, engineering products, processed agriculture products, marine products, sports goods, toys and all SME sectors.
Now banks will charge interest rate not exceeding BPLR minus 4.5% on pre-shipment credit up to 180 days and post-shipment credit up to 90 days on the outstanding amount for the period between 1 April to 31 December this year, financial sector secretary Vinod Rai.