The forthcoming annual supplement to the Foreign Trade policy is expected to liberalise the existing export promotion schemes like the advance licence scheme and the export promotion capital goods (EPCG) scheme for exporters.
"The existing schemes are being examined to see how they can be made more favourable for the exporters. The schemes like the EPCG and advance licence could be liberalised further by removing some of the conditionalities," a senior commerce department official said.
The advance licence scheme is used by exporters to import raw materials or inputs, while the EPCG is used to import capital goods.
Several measures to reduce the transaction cost for exporters are also under consideration. The task force appointed by Commerce and Industry Minister Kamal Nath has finalised its report.
Some of the recommendations of the task force include the setting up of 24-hour helplines by the export promotion councils for exporters, encouraging barcoding and the introduction of a duty remission scheme to rebate up to 10 per cent of the unrebated duty (excluding excise and Customs).
As per estimates made by the directorate general of foreign trade (DGFT), the transaction cost accounts for around 18-22 per cent of the FOB (free on board) value of exports.
Of this, around 10 per cent comprises unrebated duties like sales tax, octroi or entry tax, duty on electricity and fuels etc., while around 2-3 per cent is because of ground-level delays in obtaining clearances or licences.
Officials said the government would soon introduce simplified forms for exporters in order to cut down ground-level delays.
"We are working on introducing a single form containing all the required information about the exporter such as the details of his business, turnover, annual exports etc.
This information will be common for any scheme. Exporters will then only have to fill an additional form for the concerned scheme," an official said.
DGFT is also working towards establishing an electronic data interchange with the Customs department, which will enable faster processing of licences and shipping bills.
The annual supplement to the foreign trade policy is also expected to contain new measures to boost exports of automobile components and pharmaceuticals.
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