Car exporters likely to get more incentives next fiscal year

NEW DELHI : Car manufacturers in India, reeling under the effects of the withdrawal of excise duty exemptions, may have something to cheer about in the new fiscal year.

The Centre is examining the possibility of extending incentives for export of cars to all markets, including large ones such as the European Union.

“The Heavy Industry Ministry has proposed to the Commerce Ministry that car exports should be included in the ‘focus product’ scheme so that shipments to major markets are incentivised,” a Commerce Ministry official said. Under the Focus Product scheme, an incentive of up to 5 per cent of the export value is given for exports of specific products to all markets.

Since automobile exports are going down despite the huge export potential, the proposal could be considered favourably, the official added.

Under the present Foreign Trade Policy, an incentive of 2 per cent of export value is given to cars shipped from India to markets where the country has an insignificant presence, such as Bangladesh, Kenya, Kuwait, Pakistan, Russia, Singapore and Ukraine. China and Japan, too, were included.

“Incentives for all sectors, including cars, will have to be carved out of the total funds for all sectors sanctioned to us,” the official said.

“To give incentives for buoyant markets that are small, like South Africa, is fine. “But giving it for Europe will involve a huge outgo,” pointed out Ajay Sahai from the Federation of Indian Export Organisations. The Commerce Ministry, however, is hopeful that the Finance Ministry will be generous in the coming fiscal year as it did not give any new sops for exports in the current fiscal year because of financial constraints.

Source : dailyshippingtimes.com