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Free trade zones, agro exports hog limelight; govt refrains from fixing growth target

In an effort to minimise bureaucratic interference, the government has decided to convert export processing zones into free trade zones on the lines of those existing the world over.

Announcing this in New Delhi today, Commerce Minister Ramakrishna Hegde said the scheme would commence from July 1, 1999. The aim of launching the scheme was to ensure that there was no interference from any department of the government.

''I believe that exporters perform the best, when they are left without any bureaucratic interference. I'm happy that the finance minister agrees with me on this count,'' Hegde said. The idea was to corporatise these EPZs as was being done in other countries.

Under the proposed free trade zones scheme, units shall be permitted to carry out any manufacturing or trading activities. They shall not be subjected to any predetermined value addition, export obligation, input-output / wastage norms.

The free trade zones units shall be treated as outside the customs territory of the country and the customs shall be manning only entry and exit points. Sale in the domestic market will be permitted on payment of full customs duty, Hegde said.

For the first time, the government refrained from fixing any export growth target for the next financial year while announcing the Exim Policy. "As they say, once bitten twice shy," Hegde said. He said last year's was not a very encouraging experience.

The government has fixed an export target of around 20 per cent for the financial year ending today but in the first ten months of current financial year, the country was able to achieve only a marginal growth of 0.41 per cent. The minister also cited a number of reasons for the dismal export growth in the current year.

However, the minister was optimistic and foresaw brighter prospects for exports compared to what has been happening over the last few years.

"The policy changes I have announced today are going to carry us into the next millennium, Hegde said and urged the trade and industry to redraw their plans and projections and renew their efforts to carve out a niche in the world market.

The Exim Policy proposed more involvement of states in the export promotion efforts.

The scheme sees bigger role for state governments, particularly in agro exports. Under the proposed scheme, assistance for infrastructure development for exports would be provided. The amount of assistance would be broadly linked to export performance of each state.

"Exports of agriculture products have been showing continuous increase in the past several years and the new scheme would further boost agriculture exports from the country," the policy document said.

Hegde said he will pursue a proposal for a plan scheme of Rs 5 billion by way of grants to states for complementing and strengthening export infrastructure to make exports a truly a national effort.

UNI

RELATED REPORTS:

Exim policy simplifies export procedures

Highlights of the Exim Policy

Commerce Ministry's annual report

ASSOCHAM's expectations from Exim Policy

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