Rupee woes makes exporters see red

New Delhi, June 13 (UNI) The appreciation of rupee against the greenback by as much as 14 per cent since August 2006 has resulted in losses amounting to five billion dollars.

The appreciation has resulted in loss to all segment of exports.

The formula for re-imbursement for different export products based on Net Foreign Exchange (NFE) criteria should be given a 7-9.33 per cent refund as on export of Freight on Board (FOB).

This can be cash refund or in-built in the DEPB and drawback scheme, Federation of Indian Export Organisations (FIEO) and the Export Promotion Organistions (EPOs) said today.

The two export bodies called on the Commerce and Industry Minister Kamal Nath with suggestions to counter the slowdown in export profit due to the unprecendented appreciation of the rupee.

Rupee can be pegged to export basket of currencies of competitors like Chinese Yuan, Thai Baht, Pakistan Rupee, Sri Lankan Rupee, Bangladeshi Taka, Vietnam Dong and the Indonesian Rupiah so as to obviate the impact of the depreciating dollar.

It was also proposed that export credit be given at five per cent instead of nine per cent. Export credit has increased by 2.5-3 per cent, with the exporters settling for a six per cent rate to sustain economical growth.

Also IT exemption under Section 80 HHC be reintroduced, or alternately Section 35 (B) of Income Tax Act where a weighted deduction of 133 per cent was allowed against export promotion expenses such as product deveploment, quality up-gradation be reintroduced, they said.

There was also a suggestion to pay interest on the Export Earners Foreign Currency (EEFC) Account for a fixed deposit tenure of three to six months at par with other fixed deposits.

The export bodies called on Mr Nath to make suitable modifications to the Market Development Assistance (MDA) Scheme so that all exporters are made eligible for MDA benefit without any threshold criteria and restriction on number of visits for participation in trade-fair/exhibition and Buyer Seller Meet organised by EPCs/FIEO may be dropped.

The need to refund taxes and duties falling under the purview of Central or state governments must be reimbuersed to exporters within a time frame of 30 days falling which interest at 15 per cent may be paid to the exporters, suggested the export bodies.

UNI