Government planning to refund local taxes, levies to exporters

Mumbai: The government is working on a scheme to refund local taxes and levies to labour-intensive industries with little import component to offset the impact of rupee, which touched a nine-year high.

"The rupee at an all-time high is a cause for concern. We are looking at framing a scheme to refund the levies and taxes to neutralise the impact and help the exporters of labour-intensive sectors with no or very little import component," commerce and industry minister Kamal Nath said on the sidelines of the third India-GCC Industrial Forum.

"It is a matter of concern not only to our exporters but also to our manufacturers as there is a possibility of cheaper imports replacing manufactured products," he said.

The rupee was trading at 40.45/46 a dollar in late morning trade, off Monday''s peak of 40.28, its highest level in nine years.

The minister, however, felt that India Inc has built up the resilience and the competitiveness to absorb the effect of appreciating rupee.

Nath said his ministry is in talks with the Reserve Bank of India and the export council to define the way forward.

On the impact of the rising rupee on trade deficit, Nath said it is likely to remain neutral as cheaper oil imports would balance the export reduction.