India lowers 2000/01 export growth target

Maran said the sector expected to grow around 12 per cent in the year ending March 2001. Gems and jewellery exports in the year ending March 2000 jumped 30 per cent to $8.03 billion from $ 6.17 billion a year earlier and accounted for about 21 percent of the country’s merchandise exports of $37.54 billion. India’s exports grew 11.6 percent in the year ending March 2000 over the previous year.

The union government will allow 100 per cent foreign direct investment (FDI) and manufacture of items reserved for SSIs in the Special Economic Zones (SEZs), Maran said.

Announcing the notification of SEZs, he said that 100 per cent FDI will be allowed in SEZs without any sectoral caps and cabinet approval for the purpose is expected within the next two weeks.

The Minister said four more SEZs would be set up in the country, taking the total number of such zones to 10. Maran said these four would be in the states of Orissa, Maharashtra, West Bengal and Andhra Pradesh.

This is in addition to two SEZs to be set up in Gujarat and Tamil Nadu and conversion of four Export Processing Zones to SEZs in Santa Cruz in Mumbai, Kandla, Vishakapatnam and Cochin.

The Minister said the four EPZs would be converted into SEZs within four weeks and the first of the six new SEZs is expected to become operational by this year.

The most important feature of the SEZs was that the area shall deemed to be a foreign territory for the purpose of duties and taxes.

Goods supplied to SEZs from the domestic tariff area(DTA) will be treated as deemed exports and goods brought from SEZs to DTA would be treated as imported goods, Maran said, adding that it meant there was no excise duty on goods supplied to SEZs and there would be customs duty on items brought from SEZs.

Asserting that the SEZs would be strong magnates for FDI, Maran said the zones would generate millions of jobs besides generating sizeable revenue.

"It would also act as a catalyst on the country’s enterpreneurial efforts and development of human capital resources," the Minister said.

The two SEZs already cleared by the government are at Nangunery in Tamil Nadu and Positra in Gujarat.They would be set up in the joint sector.

Four other SEZs would come up in Dronagiri in Navi Mumbai, Paradeep in Orissa, Kulpi near Calcutta and Kakinada in Andhra Pradesh.

While Orissa had earmarked 500 hectares of land for the SEZ, Maharashtra government had allotted 1,198 hectares in Navi Mumbai and West Bengal government had set aside 8,000 hectares, Maran said.

Maran said that during his recent visit to England and France, several businessmen evinced interest in making FDI in SEZs but they wanted more flexible labour policies and putting in place an exit policy.

Maran said he, however, made it clear that any change in labour policy and introduction of an exit option would not be possible in near future.

Maran said a team of trade officials from the European Union(EU) is due to arrive in early June for talks with India on increasing its textile exports to the Union.

The EU earlier this month agreed to allow India to export anextra 3,500 tonnes of textile products to the 15-nation bloc this year. The agreeement was expected to end a deadlock on the implementation of a 1994 EU-India agreement in textiles trade.

But Maran said India was sticking to its earlier demand to be allowed exports of an extra 8,500 tonnes.

"We are insisting upon being allowed 8,500 tonnes, they have agreed on 3,500. We will have talks when the team comes here next month," he said.

At the same time, Maran said India would not hesitate to impose anti-dumping duties to protect domestic industry.

"Currently there are anti-dumping enquiries into 42 items. We won’t keep quiet if our interests are hurt," he said.