New Delhi: India is likely to extend a tax-refund scheme and interest subsidies for exporters in the fiscal year 2008/09, Commerce Secretary G.K. Pillai said on Tuesday.
India is struggling to meet its annual export target of $160 billion as a rise in rupee value by more than 12% during 2007 squeezed margins of exporters.
During April-January, India’s exports grew by 21.6% to $124.19 billion and policymakers estimate it to touch $155 billion by March end.
Last year, the government has announced relief measures to ease the pain of exporters especially in textile, leather, handicrafts, marine products and auto parts.
Pillai said there could be more incentives for exporters hit by the rupee rise in the trade policy review next month.
“All that is being discussed. Wait for a few days,” he said on the sidelines of a business conference without elaborating.
Exporters have also been demanding refund of local levies like electricity charges, central sales tax and sales tax on fuel as it raised their costs and hit margins.
Last year, the commerce ministry had announced plans to revamp the existing tax refund scheme or the Duty Entitlement Pass Book (DEPB) scheme, so that all the federal and local levies could be refunded to exporters.
But the finance ministry is yet to agree on the new scheme.
“We are asking for extension of the DEPB scheme for one year,” Pillai said.
He also said the ministry was seeking extension of the interest subsidies offered to exporters on their bank loans beyond March 31.
Last year, the government decided to share 2% of the interest exporters pay on bank loans at a total cost of Rs8 billion.