New Delhi: The modified export-import (Exim) Policy for 2003-04 aims at identifying the “engines of growth” such as hitherto under-exploited services exports and special economic zones (SEZs). It also strives to build India’s core competence in areas like agriculture and allied product exports with special focus on high-growth segments including textiles, auto components, gems and jewellery, drugs and electronics hardware.

Announcing the modifications to the five-year Exim Policy (2002-07) yesterday, Union Minister of Commerce and Industry Arun Jaitley said the approach will be to “relentlessly pursue the goal of making India a significant player in the world market by leveraging the country’s undoubted strength such as intelligence, innovation and entrepreneurship of every Indian.”

He said besides software exports, a host of other services now provide vast opportunities in global trade and “we are taking a bold initiative in not only recognising the importance of service exports but also introducing a scheme for the promotion of export of services.”

In a move to facilitate and promote export of services from other sectors, Jaitley announced that import of consumables, office and professional equipment and spares will be allowed up to 10 per cent of the average foreign exchange export earnings in the previous three years.

Since many of the services have not made a start in the direction of exports, the facility will be extended to newcomers also against bank guarantee to the extent of the revenue sacrificed, subject to actual user condition. This will particularly help in the health sector to enable India as a major hub for health services, Jaitley said.

In the tourism sector, the policy announced the extension of the benefits of the Advance Licencing Scheme by allowing recognised hotels of three-star category and above and other registered service providers in this sector duty-free import of consumables and spares up to 5 per cent of their average foreign exchange earnings of the previous three years subject to actual user condition. But the import of agricultural and dairy products will not be allowed against this entitlement.

For the entertainment services, the government will promote investment in the venture capital fund for the industry through suitable tax sops in consultation with the finance ministry. Sector-specific working groups will be set up towards evolving a common goal by framing action plans to be implemented within specified timeframe.

As the collection of reliable statistics for export of services is yet to be in place, a group consisting of representatives of the commerce department, CSO, RBI, DGFT and DGCI&S will weigh all aspects of this issue and recommend a system for collection of data relating to services exports.

Underlining the importance of agriculture and allied products as an area of core competence, the policy provided that the corporate sector with proven credentials will be encouraged to sponsor agri-export zones for boosting agro exports. Appropriate fillips were being under way in consultation with the finance ministry to enable investments by these corporate in infrastructure, processing, packaging, storage, R&D, agricultural extension and other amenities relating to exports in the approved AEZs.

Alongside, there will be changes in the norms for fixation of DEPB rates for selected agro products, which will factor in the cost of inputs such as fertilisers, pesticides and seeds in order to help the farmers use the required inputs in a scientific way to boost productivity and quality.

The policy also removed quantitative restrictions on import of 69 items covering animal products, vegetables and spices, antibiotics and films. Export of five items (paddy except basmati, cotton linters, rare earth, silk cocoons, family planning devices except condoms) were also removed restricted list.

On sector-specific spurs, the policy announced diamond and jewellery account for exporters dealing in purchase and sale of diamonds and diamond-studded jewellery. There are also a series of steps to make the Export Promotion Capital Goods (EPCG) scheme more flexible and attractive so that even the small-scale sector could step up and expand its manufacturing base for exports.

For the fast-growing export status-holders, they would continue to play a key role in boosting exports from the small-scale sector since most of the small units were not in a position to directly access the global market. A duty-free entitlement would be given to them for import of capital goods, spares, office equipment and consumables.

This will be available to the status-holders achieving a growth rate of 25 per cent or more in the current year with a minimum export value of Rs 25 crore. They will be given duty-free entitlement of 10 per cent of the incremental growth in exports during the current year, subject to actual user norm.

Highlighting the potential of export clusters in enhancing the overall competitiveness of selected industrial locations, the government said the formulation of an industrial infrastructure upgrading scheme is in the final stage of approval. To begin with, 10 such clusters with high-growth potential will be bolstered to bridge the technology and productivity gaps.

On procedural simplification measures, the department is gearing itself to provide online approvals to exporters in 23 EDI (electronic data interchange) ports in the country. The policy also introduced annual advance licence facility for status holders so that they could plan for imports of raw materials and components on an annual basis and take advantage of bulk purchases.

The policy also included 11 more countries to the existing seven countries in ‘Focus: Africa’ taking the total African countries to 18 for focussed attention to step up India’s exports. ‘Focus: CIS’ announced in the last year’s policy will take off from 1 April 2003.