Exporters met Finance Minister Arun Jaitley on Tuesday and sought extension of the interest subvention scheme that lapsed at the end of last fiscal.
They also demanded that they be exempted from payment of service tax on services consumed for export purposes.
With the Government more or less decided on not having a new Foreign Trade Policy (FTP) this year due to paucity of funds, a delegation from the Federation of Indian Export Organisations (FIEO) met the FM to convince him to at least hand out some concessions to the sector.
“We told the FM that the interest subvention scheme has to be made available this year as the high interest rates are making our exports uncompetitive in the global market,” Federation of Indian Export Organisations’ President Rafeeque Ahmed told Business Line.
With demand from the Western markets, especially the EU, still uneven, overall outbound shipments in the April-November 2014-15 period posted a mere 5.02 per cent year-on-year increase to $215.75 billion.
Under the interest subvention scheme, exporters of items such as handicrafts, carpet, handlooms, readymade garments, a number of other textile products, processed agriculture products, sports goods, toys and certain engineering products, are entitled to an interest subsidy of 2 per cent.
Exporters have demanded that the scheme be restored with retrospective effect from April 1, 2014, as it would help them fare better in the competitive global market.
“Our competitors are paying an interest rate of about 6-7 per cent, while we have to pay about 12 per cent. It is affecting us badly,” Ahmed said.
Exporters have also asked the FM to exempt them from payment of service tax on payment for services such as terminal handling charges, container freight stations, clearing housing agents, courier charges for export documentation and ECGC premium.