State Trading Of Petrol, Diesel, ATF May Continue

New Delhi, March 27: | Updated: Mar 28 2003, 05:30am hrs
State trading of some import commodities introduced by the government nearly two years ago is likely to be retained in the export and import (Exim) policy to be announced on Monday. The items are petrol, diesel, aviation turbine fuel, wheat, rice and maize.

The designated public sector agencies while undertaking imports will function on commercial principles in accordance with Article XVII of the General Agreement on Tariffs & Trade (GATT). The scheme is aimed at preventing a floodgate of imports of these items with the removal of quantitative restrictions on 714 tariff lines from April 1, 2002.

As for export items, most of them have been taken off the negative list, obviating the need for registration with state agency concerned and quantitative ceilings. The exceptions are onion, jute, iron ore and chrome.

The market access initiative, which was introduced in 2001 for undertaking market promotion abroad on country-product focus approach basis, will also be continued in the new policy. An allocation of Rs 42 crore had been made in 2002-03 for the purpose.

Moreover, a list of 106 items identified in the commerce ministrys medium-term export strategy (2002-07) announced on January 31, 2002, will receive special focus through the existing export promotion schemes.

On the other hand, a proposal for import of second-hand machinery under the export promotion capital goods (EPCG) scheme mooted by Apparel Export Promotion Council is unlikely to be accepted by the government.

This is because the scheme permits imports of only new machinery at 5 per cent duty against a stiff export obligation. Another reason is that imports of such machinery are already permitted outside the scheme without involving an export obligation but with payment of applicable duty. Similarly, it is unlikely that the government will accede to the demand of domestic units which export 75 per cent or more of their total output to be treated on par with 100 per cent EOU in respect of incentives. These units do not want to come under the fold of the EOU scheme but prefer a separate chapter to be included in the policy entitled Hundred per cent exporting units in the domestic tariff area.

Spearheading the demand, Delhi Exporters Association( DEA) has garnered the support of Fieo, AEPC and export promotion councils. DEA president SP Agarwal even convened high-level meeting of representatives of these bodies in Delhi last week to take follow up action with the government on the demand.