Exports rise for 2nd straight month,up 4.25% in Feb

* Trade deficit narrows to $14.9 billion from $20 billion in Jan

Indias exports increased by 4.25 per cent to $26.25 billion in February,registering positive growth for the second straight month after being in the red during the previous eight months,largely on the back of a revival in demand being seen in key developed markets,government data showed on Monday. With exports surging,the trade deficit narrowed to $14.9 billion in February as compared to $20 billion the previous month.

Indicating the government is set to announce measures by the month end to boost export,commerce secretary SR Rao told reporters that during the month,imports rose 2.6 per cent to $41.18 billion. Europe is performing better now. Sectors which have large weightage especially engineering has started performing better and refined oil too, he said adding that sectors including rice,oil meals,pharmaceutical and chemicals also performed well during the month.

Commerce and industry minister Anand Sharma has already said the export target of $360 billion will not be achieved during the current year given the global situation.

Rao said the government is working out incentives for exporters which will form a part of the forthcoming foreign trade policy (FTP),likely to be announced by the end of the month. We are actively involved in consultations with chambers,export promotion councils,various departments and state governments and trying to arrive at a package of incentives which would be announced shortly, he said.

Reacting to the data,Federation of Indian Export Organisations (FIEO) president Rafeeque Ahmed said,The encouraging figure of employment in US for the last month,Japan return to growth,Chinas impressive export performance and better economic indicators for the emerging economies points to improving global sentiments.

During April-February,however,exports declined 4 per cent to $265.95 billion even as imports grew by 0.25 per cent to $448 billion,leaving a trade deficit of $182.1 billion.

ComMin mulls allowing exporters to pay service tax via tradeable duty credit scrips

Shruti Srivastava

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The commerce ministry is working on allowing exporters to make payment of service tax through tradeable duty credit scrips,a move that is likely to improve cash flow of exporters.

A commerce ministry official told The Indian Express that the proposal is being considered and views of the finance ministry have been sought. Currently,duty credit scrips are allowed under schemes like focus product,focus market,status holder incentive scrip and market-linked focused product scheme for excise and customs duty payment based on the performance of exporters. It is like cash-in-hand for exporters and they can trade these scrips for paying excise duty and customs duty. It is likely to become a part of the foreign trade policy (FTP), the official said. A certain percentage of value of goods is given to exporters based on their export performance and the scrips are tradable in the market.

The scrips,issued by the commerce ministry,are permitted to be utilised for payment of excise duty for domestic procurement. It will be a welcome move as it would mean money in the hands of exporters, Sanjay Budhia,chairman of CIIs national export-import committee said. Services comprise 40 per cent of total exports. However,the finance ministry,which is yet to finalise its view on the issue,is not in favour of the proposal arguing that the risk of misuse of scrips in service tax payment is very high.

Goods can be verified physically but services cant be. Therefore the risk of misuse of the provision is there. Also,the scrips are trade-able so there is an apprehension that the scrips might not be availed of by actual exporters, a finance ministry official said.