Exports transaction cost to be cut by 40 percent

NEW DELHI - The government has taken steps to reduce exports transaction cost by at least 40 percent within a few months and may extend stimulus package to sectors which are not covered in the policy supplement announcement.

“We target to bring down the transaction cost by 40 percent within a few months. It will make our exports more competitive,” Commerce and Industry Minister Anand Sharma said Tuesday, adding that the government would take all necessary measures to reduce the transaction cost further.

The government has constituted a task force on transaction costs, which is headed by Minister of State for Commerce and Industry Jyotiraditya Scindia. The task force is mandated to identify and suggest measures to reduce transaction cost.

Scindia said the task force has identified 44 issues that are major impediment to foreign trade.

“These issues are related to various departments and ministries. I am discussing these issues with the concerned persons and I assure you that we will come out with some concrete results soon,” Scindia told reporters on the sidelines of an event organised by the Confederation of Indian Industries.

Scindia said transaction of exports cost nearly $14 billion annually. This is nearly seven percent of India’s total exports value.

Total merchandise exports from India was $178.66 billion in 2009-10. The government targets to increase it to $200 billion during the current fiscal.

In the first quarter of the current fiscal, exports grew by 32 percent. However, in July it slowed down to 13.2 percent.

Sharma said the government was closely monitoring the numbers and would provide further incentives to the sectors which needed help. “We will review the policy in December. However, we can come out with sector specific incentive packages even before that,” he added.

In annual supplement to the Foreign Trade Policy 2009-14 Monday, he announced Rs.1,050 crore additional bonus incentives for the exporters who are involved in labour- intensive sectors, like handicrafts, textiles and leather goods.

– Indo-Asian News Service