Centre to purge small hurdles in big export push
Nov 14 2012 , New Delhi
Unwanted paperwork and poor port facility listed as key targets
A working paper authored by senior economic advisor H A C Prasad in the ministry has listed poor port facilities, unwanted paperwork and multiple documentation as major hurdles. These can be rectified at no cost to the exchequer – and rectified forthwith.
Exports have been falling persistently and immediate procedural changes will help quickly reverse the decline, analysts say.
India ranks 132th in the ease of doing business, but in foreign trade it is ranked in the 109th position. Singapore tops the rankings and China is at 60.
In India, 16 export documents need to be cleared, whereas it is only five in China and just two in France. The export time is 16 days from India and just five from Denmark, the working paper says, adding that the cost of exporting a container in India is $1,095, against $500 in China and $450 in Malaysia. Imports also take longer than necessary; it is 20 days here but just four days in Singapore.
The paper says the procedural changes do not require legislative approval and can be brought about within a short time with a noticeable increase in export earnings.
Exporters believe micro and issue-specific measures can raise exports by one-fifth.
Exporters here are required to sign at least in 130 places on documents to complete a transaction. It is as bad on the import side too.
The popular export promotion capital goods (EPCG) scheme that helps exporters acquire technology for manufacturing export goods needs submission of 129 pages of documents. Every page is to be signed by the exporter.
“These need to be reduced to the barest minimum,” the paper says. This reduction does not require any overhaul in the policy framework. The procedural changes that are needed are ‘doable in the short and medium term and make the wheels of export growth move faster.
On infrastructure, the paper says the best of our ports do not have state-of-the-art technology as Singapore, Rotterdam or Shanghai has.
A small issue like port road connectivity in Chennai and Ennore is a major hurdle to trade. In Chennai, it is a problem of road congestion, in Mumbai and JNPT, it is port congestion.
The suggested procedural and documentation changes are in areas, including the system of printing and certifying export promotion, multiple copies of shipping bills, filing of export general manifests and transmission of export data between the customs and DGFT for claiming export benefits.
There are also many sector-specific trade facilitation issues that need to be addressed, particularly in textiles and gems and jewellery exports. The working paper wants charges for renewal and enhancement of credit limits to be rationalised. Further, service charges levied by banks need to be capped to ensure that credit is available at lower cost to exporters.
Classification of some export items causes unusual delay in clearance of goods by the customs. These have to be sorted out by issuing clear-cut instructions on classification to the customs department at various ports and airports, it said.