The government on Tuesday announced a host of measures, including 24x7 customs clearance at eight ports and reduction in levies to ensure quicker movement of
export consignments and cut transaction cost for exporters by Rs 2,100 crore ($467 million).
Finance minister Pranab Mukherjee released a report of the task force on transaction costs that has made 44 recommendations aimed at improving the competitiveness of
Indian exports.
Commerce minister Anand Sharma said the average cost of moving a container within India is $945, which is more than twice the cost of China's $460, Malaysia's $450 and Vietnam's $625.
As many as 21 of the 44 issues identified by the task force related to various ministries and departments have now been implemented and another two will be implemented soon, minister of state for commerce and industry Jyotiraditya M. Scindia said.
The major recommendations that have been implemented include round-the-clock customs clearance at eight ports - Visakhapatnam, Kolkata, Jamnagar, Mangalore, Jawaharlal Nehru Port Trust (Navi Mumbai), Mumbai, Bhubaneswar and Chennai - and a reduction in various levies.
Booking charges for foreign currency have been reduced from Rs 750 per transaction to Rs 400-500 per transaction.
SMOOTH SAILING
- Task force report has made 44 recommendations
- Cost of moving a container in India is $945 against China's $460, and Malaysia's $450
- Eight ports will see round-the-clock customs clearance
- Booking charges for foreign currency have been cut to Rs 400-500
- Charges levied at Delhi International Airport for screening express cargo & courier have been reduced to Rs 1.65 per kg
- Banks to extend pre-shipment credit in foreign currency at London Interbank Offered Rate (Libor)
- Commercial banks to make post-shipment credit available at prescribed rates up to 180 days
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The charges levied at the Delhi International Airport for screening express cargo and courier shipments have also been reduced from Rs 6 to Rs 1.65 per kg.
To facilitate easier finance for exports, leading banks have agreed to extend pre-shipment credit in foreign currency at London Interbank Offered Rate (Libor) plus two per cent with no additional charges. The Reserve Bank of India (RBI) has instructed all commercial banks to ensure that post-shipment credit is available at prescribed rates up to 180 days, as stipulated in case of overdue bills.
"It is expected that implementation of 23 issues is likely to reduce the transaction cost by approximately Rs 2,100 crore. Permanent reduction of transaction cost through these initiatives will have a long term positive impact on the competitiveness of India's exports," Scindia, who chaired the task force, added.
While infotech and services exports have played a key role in the country's economic growth, merchandise exports have been lagging behind.
Scindia said Indian exporters pay around $13- 15 billion as transaction costs, of which losses from poor infrastructure and red tape account for about $6 billion.
"We need to work on lowering of shipping and railway freight rates. But this is not easy as there are revenue ramifications for the shipping department and revenue ramifications for the railway department. We need to build a lot of consensus," he added.
"We recognise that it is essential to first of all reduce the total time the cargo takes from the factory gate to leave Indian shores. Secondly, we need to take measures that will reduce the financial cost of export transactions," Pranab Mukherjee said.
Courtesy: Mail Today 
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