Export growth dependent on three pillars: Minister Scindia

New Delhi, India, August 24, 2010: Minister of State for Commerce and Industry, Mr. Jyotiraditya Scindia said that exports growth was dependent on three pillars. These are good infrastructure, low transaction costs and full refund of all indirect taxes on inputs paid by exporters. He was addressing the Export Summit and Interaction of Foreign Trade Policy organized by the Confederation of Indian Industry (CII), here today.

Elaborating on the theme, Mr. Scindia stressed on the work that has been done by the Taskforce on transaction costs to address exporter concerns related to the high cost of moving goods from factory to port. The Minister pointed out that a large number of recommendations of this taskforce have already been implemented in the supplement to the Foreign Trade Policy (2009-14). Work still needs to be done in partnership with some of the other key stakeholder Ministries such as Railways and Shipping to ensure the implementation of the remaining issues highlighted by the Taskforce.

Complementing the Minister for working closely with the industry and making the reduction of the transaction costs a policy priority, Mr. Sanjay Budhia, Chairman, CII National Committee on Exports, said that the work done by the Taskforce on transaction costs is unique in the sense that it is just not a report but has an implementation deadline to ensure actualization of the recommendations made by it.

In his remarks Mr. Sunil Mitra, Secretary, Department of Revenue, agreed with the Minister’s comments and said that ensuring indirect taxes on inputs are refunded to exporters is important for India’s export competitiveness. He said the current tax regime often puts the exporters at a disadvantage and also does not provide a level playing field to domestic manufacturers vis-a-viz import competition. Commenting on plethora of taxes and the variation in state level VAT, the Secretary said that implementing the GST is the key to ensuring the competitiveness of India’s manufacturing sector and export growth.