Home» Circulars» Imp Suggestions On Wto Compliant Export Incentives In Lieu Fine Tuning Of Existing Export Promotion Measures Under Ftp 2015 20 And Department Of Commerce

Imp

Suggestions on WTO Compliant Export Incentives in lieu/ fine tuning  of

existing export promotion measures under FTP 2015-20 and Department

of Commerce

Dear Members,   As you are aware, in the recent times India has come under pressure from USA/WTO in connection with direct export incentives/subsidies (specially MEIS).   In this regard,  O/o DGFT HQ has set up a committee to review Export Promotion measures under FTP 2015-20/  DoC  and suggest remedial measures for fine tuning  as per WTO norms.  This committee is chaired by the DGFT himself and also comprises of representatives of TPD, IIFT, FIEO, EPCs etc.  The committee  also has  state commissioners/ authorities via video conferencing to understand what subsidies states are offering.   The first meeting was held recently in New Delhi which was also attended by  CHEMEXCIL representatives.  The important  points deliberated  are as follows:   This meeting   was mainly  focused on discussing phase out/ fine tuning  of incentives (specially MEIS)  and explore possible other ways of WTO compliant export incentives which are not counter-vailable as India has crossed USD 1000 per capita criteria. General perception amongst participants (specially academics) is  that MEIS is not WTO Compliant. It was also felt that nowadays even state subsidies need to be relooked as some of them are counter-vailable.   Out of existing  provisions,  duty remission/ neutralization schemes  advance authorization/ DBK are only somewhat  WTO compliant and may be continued/ fine tuned.  Similarly, state levies such as electricity duty etc can be neutralized, but only with proper justification/ workings.   Chemexcil representative submitted the points from chemical sector perspective. and also requested the  committee that we should get level playing field vis.a.vis China as they are getting very high incentives.   However, some of participants countered that incentive in China is not flat 13% but includes several hidden  areas such as  duty remission, land availability, subsidized power etc.  Further,  it was highlighted that if there was an issue with MEIS then to give some additional incentive in DBK which had come down  in recent years despite no change in customs tariffs and also factor state levies such as electricity duty etc. We also requested them to provide support for registration costs, fighting anti dumping investigations, SPS-TBT measures etc   The group will keep discussing/meeting to submit report to DoC within 3 months.   In our view, our council should also discuss/ undertake study in this regard and suggest export promotion measures which are WTO-compatible and production-based,  provide support for technology upgradation, capacity building and resolve infrastructure bottlenecks and move away from direct incentives to exporters.   Members are therefore requested to  provide suggestions at the earliest (within a week) on ed@chemexcil.gov.in and deepak.gupta@chemexcil.gov.in to enable us  submit the same to DGFT.   Thanking you,   Yours faithfully,   S.G BHARADI EXECUTIVE DIRECTOR CHEMEXCIL