Exporters Banking on Government for Relief

Battered by the adverse impact of the global economic deceleration, the Indian SME export sector has been recording poor performance since the last year. Going by the industry projections and prevailing hostile trading conditions, a major turnaround in the dipping export growth curve looks unlikely in the next few quarters. The first two quarters of 2009-10 is anticipated to be challenging for the domestic export sector. Hence, SME exporters are now pinning their hopes on the newly elected government for providing them some relief in the upcoming budget.

Demand of exporters

The Indian exporters have already drafted a proposal, seeking sops in the upcoming budget in order to revive the export volumes. Rationalisation of tax structure and hike in the reimbursement rates tops the recommendation list that has been drawn by the various export organisations in India for the government.

“Tax exemptions including exemption from payment of fringe benefit tax (FBT), exclusion from the payment of service tax, income tax exemption for 5 years and withdrawal of other taxes can ease the burden on the Indian SME exporting units,” commented A Sakthivel, President of the Federation of Indian Export Organisation (FIEO).

Priority to Indian SME exporters

Export associations are also seeking increase in the input duty reimbursement rates under schemes like Duty Entitlement Pass Book Scheme (DEPB) scheme and duty drawback rates to help maintain the competitive edge of the small-scale exporters against their counterparts in neighbouring countries like China, Vietnam and Bangladesh.

“Extension of export incentives and reduction in taxes can ease the recessionary pressures, which have stifled the growth of the SME export sector. In the current scenario, it has become imperative for the government to give priority to the export sector and provide these benefits,” commented OP Agarwal, Chairman of a tea exporting house in Kolkata, AMBO Exports.

Besides meeting industry demands, the government needs to launch initiatives and trade policies that will boost the SME export sector and help it to recover fully from the adverse impact of the economic downturn.

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