Horticulture, AEZs are now agri future

Realising the untapped potential of agricultural exports, it is identified as one of the thrust areas in the new trade policy. Apart from an...

Realising the untapped potential of agricultural exports, it is identified as one of the thrust areas in the new trade policy. Apart from announcing a new scheme that ensures a substantial duty reduction for horticulture and additional funds for the Agriculture Export Zones (AEZ), there are promises made on liberalising imports of seeds and fertilisers.

While one will have to wait for action on the latter front, the fact that there’s no mention of food grains in the policy is a major shift in thinking in the government. For the first time, there is recognition that horticulture is the future.

In new scheme Vishesh Krishi Upaj Yojana (VKUY), exporters of fruits, vegetables, flowers and the like shall be entitled for duty credit equivalent to 5 per cent of FOB value of exports for each licencing year. The duty credit and the items imported against it would be freely transferable.

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The additional customs duty/excise duty paid in cash or through debit under the VKUY shall be adjusted as duty drawback. However, industry feels the duty cut should have been extended to aquaculture.

Another major gain is duty free import of capital goods under the EPCG scheme. These capital goods for agriculture are supposed to be installed anywhere in the AEZ. For AEZs itself, there is a major boost — funds shall be earmarked under ASIDE for development. Units set up in these areas would be exempt from bank guarantees.

Finally, there will be a major boost for export of plant portions, derivatives, and extracts by liberalising it in order to promote export of herbal and medicinal products. And there is a proposal to set up new biotechnology parks.

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