Exports Fall For Fourth Month - March 4, 2009

The Indian exports for the fourth month in a row contracted, reflecting the dismal demand conditions in key markets like the US and Europe. The exports in the month of January fell by 15.9 per cent to $12.3 billion, which is the worst performance since June 1998. With the weakness expected to continue through the fiscal year, the government also cut its export target from $200 bn earlier to between $170 bn and $175 bn.

The consumer- driven segment like gem and jewellery is the worst hit among all the categories. While the exports continue to take a knock, the trade deficit narrowing in the month of January. The trade deficit narrowed to $6.1 bn from $7.6 bn in December, mainly on the back of fall in imports of oil by 47 per cent to $4.4 billion. The overall imports in January were also lower by 18 per cent at $18.4 bn, reflecting the lower oil import bill. The reports of a continued fall in exports comes just days after the government announced another package of Rs 325 crore for the exporters by providing them the cheaper as well as easier access to capital.

Indian Exporters May Get Additional Concessions

New Delhi: Indian exporters likely to get additional concessions in this year''s annual supplement to the foreign trade policy 2004-09 so as to offset the impact of the rising rupee. The supplement is scheduled to be released in the first half of April this year.

Exporters were disappointed with Budget 2008-09 as it does not propose any specific measures to help them tide over the situation. In the April-January period of 2007-08, exports stood at $124.19 billion, an increase of 21.62 per cent from $102.12 billion during the year-ago period.

FM Extends Tax Refund To Exporters Of 3 More Services

New Delhi: The Finance Ministry on Feb 19, extended the service tax refund scheme for exporters to three more taxable services, taking the overall number of such services to 13. The three services eligible for service tax refund are courier services, goods transport agency services availed for transport of export goods from the place of removal to actual place of export that is inland container depot (ICD)/airport/port and transportation services in containers by rail from the ''place of removal'' to ICD/airport/port.

These three services are not in the nature of input services but could be connected to export goods and hence the decision to permit refund of service tax. Service tax paid by exporters on input services used for export goods is neutralised under various existing schemes like drawback scheme. So far, the Finance Ministry has specified about ten taxable services, which are not in the nature of input service but could be attributable to exports, as services that would qualify for service tax refund. These comprise port services provided for export, transport services on road and rail for movement of goods from ICD to port of export, general insurance services, technical testing and analysis agency services, storage and warehousing services and business exhibition services.