Commerce ministry directs field formations to reduce average export obligations for sector
In a relief to exporters, the commerce ministry has directed the field formations to reduce average export obligations for sectors that have registered more than 5 per cent decline in shipments during 2021-22. A total of 192 product groups registered a decline of more than 5 per cent in exports in 2021-22 compared to 2020-21 and that includes certain ores, gold, yarn, ground nut oil and cheese and curd.
The Directorate General of Foreign Trade (DGFT) in a public notice said that the sector/product group that witnessed such decline in 2021-22 as compared to 2020-21 would be entitled for such relief. The DGFT asked its regional offices to re-fix the annual average export obligation for the Export Promotion Capital Goods (EPCG) authorisation for 2021-22 accordingly.
Under the EPCG scheme, imports of capital goods are allowed duty free, subject to an export obligation. The authorisation holder (or exporter) under the scheme has to export finished goods worth six times of the actual duty saved in value terms in six years. The objective of the Export Promotion Capital Goods (EPCG) scheme is to facilitate import of capital goods for producing quality goods and services and enhance India's manufacturing competitiveness.
Foreign trade policy (2015-20) was extended till March 31 next year envisages that to provide relief to exporters of those sectors where total exports in that sector/product group has declined by more than 5 per cent as compared to the previous year, the average export obligation for the year may be reduced proportionate to reduction in exports of that particular sector/product group during the relevant year s against the preceding year.
