ANNOUNCEMENT 30 Jun 2009In June 2009, the government of India announced a change in import duties and a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
"Budget 2009-2010" Speech of the Minister of Finance, 6 July 2009.
In his Budget Speech of 6 July 2009, the Indian Minister of Finance made a number of announcements that affect Indian commercial policies. These include:
"Restoring Export Growth
31. Our exporters by virtue of their close links to the external sector have borne the brunt of the global economic crisis. It is, therefore, appropriate that we continue to provide all possible assistance to our exporters to help them overcome the short term disadvantages. More specifically:
(a)An adjustment assistance scheme to provide enhanced Export Credit and Guarantee Corporation (ECGC) cover at 95 per cent to badly hit sectors had been initiated in December 2008 to mitigate the difficulties faced by the exporters. In view of the continuing contraction in exports, I propose to extend the benefits of this scheme up to March 2010.
(b)The Market Development Assistance Scheme provides support to exporters in developing new markets. With many traditional markets still under financial stress, greater effort is required to identify and develop new markets. I propose to enhance the allocation for this scheme by 148% over BE 2008-09 to Rs.124 crore.
(c)With a view to insulating the employment - oriented export sectors from the global meltdown, Government had provided an interest subvention of 2 per cent on pre-shipment credit for seven such sectors. These sectors are textiles including handlooms, handicrafts, carpets, leather, gems and jewellery, marine products and small and medium exporters. I propose to extend the interest subvention beyond the current deadline of September 30, 2009 to March 31, 2010 .
(d)Micro, Small and Medium Enterprises (MSMEs) have been affected by the slowdown in exports and the indirect effect of the global crisis on domestic demand. To support this sector, I propose to facilitate the flow of credit at reasonable rates, by providing a special fund out of Rural Infrastructure Development Fund (RIDF) to Small Industries Development Bank (SIDBI). This fund of Rs.4,000 crore will incentivise Banks and State Finance Corporations (SFCs) to lend to Micro and Small Enterprises (MSEs) by refinancing 50 per cent of incremental lending to MSEs during the current financial year.
(e)In February, 2009 the Print Media was given a stimulus package comprising waiver of 15% agency commission on DAVP advertisements and a 10% increase in the DAVP rates to be paid as a 'special relief' subject to documentary proof of loss of revenue in non-governmental advertisements. Since Print Media is still passing through difficult times, I have decided to extend the stimulus package for another six months from 30th June, 2009 to 31st December, 2009."
Tariff increases were announced for set top boxes, gold bars, other forms of gold, and silver. Duty reductions were announced for LCD panels, permanent magnets, certain influenza vaccines and drugs relating to life-threatening diseases and the materials used to manufacture these drugs, two life saving devices for persons with heart conditions, wool waste, cotton waste, and bio-diesel. Rough corals will be exempt from import duty.
The list of export-oriented sectors eligible to import raw materials, parts, and components (up to a prescribed limit) duty free is to be expanded, specific details are forthcoming.
Exporters were also granted certain exemptions from pay service taxes related to goods transportation and the fees of commission agents.