Centre weighs allowing work-from-home in special economic zones

The union government is considering extending work from home (WFH) to 100% of the workforce in all Special Economic Zones (SEZ) in order to boost services exports and tackle with shortage of manpower, Commerce Minister Piyush Goyal said at the sideline of the Board of Trade meeting on Tuesday.

This move would impact about two million people employed across over 350 SEZs, which contribute to over 25% of total exports from India. Notably, a majority of SEZs in India houses information technology (IT) or IT-enabled services firms involved in manufacturing software, electronic items and assembled parts such as printed circuit boards.

“The situation right now is such that if you force employees [to join offices], people move elsewhere or change the company. So, allowing WHF can boost services exports. This is being considered for all sectors.

We had allowed work from home (WFH) in SEZs during Covid-19 which proved beneficial for our services sector and the exports jumped sharply. This year the jump will be even higher. Global MNCs have robust hiring plans from India,” Commerce Minister Piyush Goyal said. 

The Center July had allowed WFH to 50% of the employees, including contractual workers, and for a maximum period of one year, for companies operating in special economic zones (SEZ).

Meanwhile, the Board of Trade meeting saw presence of representative across sectors discussed impediments boosting exports. The meeting was held at a time when exports declined on a sequential basis, the trade deficit eased slightly in August to $28.7 billion from a record $30 billion in July.

 Official estimates suggest merchandise exports are expected to grow by 7-8% to at least $450 billion after registering an all-time high of $420 bn in the last financial year.

CAIT secretary general Praveen Khandelwal called for reconsidering the restrictions imposed on the import of tyres. Khandelwal further said that more efforts are needed to promote small artisans, craftsmen, artists etc to provide them linkage with Trade Promotion Body.

Meanwhile, EEPC India proposed cheaper export finance for MSMEs, guidelines and for rupee trade with Russia in the Board of Trade meeting. EEPC India Chairman Mahesh Desai also proposed to withdraw export duty on selected steel items as it will be especially helpful for the MSMEs.

Desai further asked the government to relook at the rates under RoDTEP and give full rebates on the taxes that still remain in the export production chain. He recommended including the steel sector under RoDTEP as steel is the most widely used raw material in the engineering industry.

“Speaking of taxes on exports, Goyal expressed his concern that the effect of taxes in the international market was that India’s products would become uncompetitive. He urged stakeholders to consider striving to lower taxes across sectors and said that overall tax collection was bound to improve with lower taxes,” the ministry said.

The commerce and industry ministry said that the board of trade focused on export target setting along with the upcoming Foreign Trade Policy and the strategies and measures to be taken in order to take forward domestic manufacturing and exports.