Cement, steel exports curbed

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New Delhi, Apr 11 The spectre of rising inflation cast its shadow on the foreign trade policy (FTP), with the Centre using the unveiling of the annual supplement to announce a ban on cement exports and removal of incentives for steel exports.

“To curb inflation in essential commodities, the government has banned the export of non-basmati rice, edible oils and pulses. Benefits of the DEPB (Duty Entitlement Passbook) scheme have been withdrawn on the export of rice, cement and primary steel items. We are also withdrawing the incentives under promotion schemes on the export of cement and primary steel items,” commerce & industry minister Kamal Nath said on Friday.

Inflation management tools dominated the minister’s FTP speech, which outlines the steps the government will take to encourage exports in 2008-09. The government announces measures every year as supplements to the five-yearly FTP. The present policy was announced in 2004 and Friday’s measures marked the end of the current series.

To help cushion exporters from the strengthening rupee, the government extended by another year the interest subsidies given to them in sectors affected by the appreciation, as well as to small & medium enterprises.

The Centre also announced more sops to boost shipments of fruits & vegetables by giving exporters of these items additional duty credit scrip of 2.5% over and above the normal benefit available under Vishesh Krishi Gram Upaj Yojna. This would be restricted to specific varieties of these items.

The minister also defended the controversial special economic zones (SEZs), saying exports from these tax-free enclaves would touch Rs 1.25 lakh crore in 2008-09, an 86% increase over the last fiscal. SEZs have also generated employment for over 2.8 lakh people, Nath said.