India mulls new relief package for exporters

The Indian government is considering another package of relief measures for exporters, hit by sharply rising rupee against US dollar, through sector-specific steps for refund of taxes and levies.
Commerce and Industry Minister Kamal Nath told reporters here on Monday that the government is “looking at measures for refund and remission of taxes to ensure that exporters get a level-playing field”.
He was optimistic about India's meeting the export target of $160 billion set for the financial year 2007-08. “The export target would be met, just as targets were met in the previous years”, the minister added.
Nath said the commerce and industry ministry was preparing a note for the cabinet for expanding the coverage of refunds to the exporters.
The earnings of exporters have been affected by a sharp appreciation of Indian rupee, which rose by about 10 percent since March this year. This has put Indian exporters at a disadvantage when compared to competitors in China, Bangladesh and Pakistan. Labour-intensive sectors like textile, leather and handicrafts are among the hardest hit.
The government in July this year came out with a Rs 1,400-crore package for exporters that included cheaper bank credit, higher rate of tax refunds and faster reimbursement of claims.
Later, it also announced concessional pre-shipment and post-shipment credit by banks for small and medium exporters and those enterprises exporting textiles, readymade garments, leather products, handicrafts, engineering products, processed agricultural goods, sports goods, toys and marine products.
In September this year, the government also exempted seven items related to exports from paying tax on services rendered by ports, railways and road transport. The government imposes 12 percent service tax and three percent education cess on services.