In an interaction with export promotion councils and exporters of handlooms, sports goods and toys, Kamal Nath, Commerce Minister concluded that rise in rupees exceeding 12 percent has greatly affected the margins of exporters and has reduced the production of various labor intensive sectors like textile, leather and handlooms.
Further, the tax exemption enjoyed by EoUs are likely get discontinued by April 2009.
With regard to such declining situation of Indian trade industry, the Government has decided to extend its support even further by granting another relief package for exporters hit by rupee appreciation.
The decision was taken after recommendations made by the Rangaranjan Committee and will be implemented in the coming few weeks. Sources from the industry confirmed that the Prime Minister held a meeting with the Planning Commission, Finance Minister and Commerce Minister on December 18 to analyze the situation post rupee appreciation.
So far, the Government has catered more than Rs5,000 crore as relief package to exporters. This included refund of service tax on selected goods, interest subvention by 2 percent, upward revision of duty drawback and duty entitlement passbook scheme rates and import duty cut on a number of man-made fibres and their intermediates.
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