Simplification of the Special Economic Zone (SEZ) rules and stepping up exports of value added goods is the need of the hour to create a strong Indian brand, top industry leaders are understood to have told commerce minister Anand Sharma in the Board of Trade meeting last month. The industry heads included ICICI managing director Chanda Kochar, Hero Honda managing director & CEO Pawan Munjal, chairman and managing director Biocon Kiran Majumdar Shaw, chairman TVS Motors Venu Srinivasan and managing director Ashok Leyland R Seshasayee among several others. They discussed ways to expand the export market and counter threat from other economies like China, Philippines and Indonesia.
?The focus of the meeting was to expand trade. However, industry brought several concerns to our attention including that of SEZs and specific export products,? a senior ministry official told FE. He said the upcoming Budget in 2011-12 is also likely to clear the confusion relating to the SEZs as this issue has been brought up several times with the finance ministry.
The official said the government is also looking to identify specific export products that would have a significant bearing on India?s trade. ?We are re-looking at various export products and whether they can be re-packaged and given an extra thrust in the export market. There needs to be a complete re-think of the export policy given the vast opportunity ahead,? he added.
Currently, the Working Group which was constituted after the BoT meeting in November is in the process of preparing a detailed report on the condition of the export market which would be submitted in the next three months. ?Once we get the report from the group then we would chalk out our export strategy. We hope that the report would be submitted before the budget,? the official said.
The government?s move comes at a time when the World Trade Organisation (WTO) has predicted that the developing countries like India and China?s contribution to the global trade would rise. The commerce ministry has also set up a core team to devise ways to double exports to $400 billion in the next five years. In a recent interview to FE director-general of WTO Pascal Lamy had predicted that while the trade among developed countries would grow 11.5% in 2010, trade between developing countries would jump by almost 17%. ?In the last ten years India has become one of the important players in the world trade along with the US, China, Japan and Bazil. It is now a major player in the global trade,? Lamy had said.
?The major thrust for our exports is going to come from SEZs. Any confusion over its implementation could be a huge roadblock,? an official said.
The finance ministry in the proposals outlined in the Direct Tax Code Bill said the profit-linked tax incentives would be available for existing SEZ units as well as those coming up before March 31, 2014. There would be a shift to investment-linked benefits thereafter.