Press Releases

Embargo for Release on Sunday, February 19, 2012 - ASSOCHAM calls for drawback benefits in SEZs against payment in rupees
Saturday, February 18, 2012

For encouraging special economic zone (SEZ) units to procure from domestic suppliers and ensure that they are able to maintain export competitiveness, industry body ASSOCHAM today called for duty drawback facility to be extended for supplies even if the payment is made in Indian rupees. Exporters are currently entitled for duty drawback benefit only if exports are made in freely convertible currency. However, reimbursement of duties is available in case of supply to SEZ developer or co-developer even if the payment is realised in rupees. Some manufacturers in SEZs prefer to source some of their inputs from the domestic tariff area (DTA) when suppliers are competitive and can adhere to stringent global standards, instead of duty free imports that they are permitted, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM). When inputs are sourced domestically, they are not affected by movements in foreign currency. The realisations become volatile if sales are denominated in foreign currency due to fluctuating exchange rates. Inputs sourced domestically should be encouraged by the government since the country saves foreign exchange involved in import of goods which the SEZ would have resorted to in the absence of appropriate domestic supplies, said secretary general D.S. Rawat in communication to the finance ministry. Despite these obvious benefits, supplies made by DTA units to SEZ units against rupee payments are not eligible for drawback benefits. There are 124 SEZs in India and most of them are concentrated in Andhra Pradesh, Tamil Nadu, Karnataka, Kerala, Maharashtra and Gujarat. Exports out of SEZs in 2010-11 moved up over 43 per cent over previous year to Rs 3.16 lakh crore. Nearly 6.77 lakh workers are directly employed in these zones that have attracted investments worth Rs 2.03 lakh crore. The government allows 100 per cent foreign direct investment through automatic route.

Press Releases
Keep paper, paperboards in negative list while signing FTAs: ASSOCHAM
Friday, February 17, 2012

Industry body ASSOCHAM today urged the government to protect the paper and paperboard industry by keeping its products in the negative list while signing bi-lateral and multi-lateral trade treaties. In various free trade agreements that India plans to sign in future, the import duty is sought to be reduced in a phased manner. The industrys output is used in educational, printing and packaging sectors. It is important to keep paper and paperboard industry belonging to the core sector outside the ambit of FTAs and recognise it as sensitive deserving special treatment, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM). The paper and paperboard industry has made significant investments to ramp up capacities for meeting domestic requirements, said secretary general D.S. Rawat. It has strong backward linkages with the farming community from whom wood (the raw material) is sourced, he said in communication to the ministry of commerce and industry. About five lakh farmers are engaged in growing plantations of eucalyptus and subabul over 10 lakh hectares. On the other hand, economic slowdown in developed countries and export-dependent economies has led to excess capacity. Taking advantage of low customs duty rate of ten per cent, these countries find India as an attractive outlet for diverting their excess inventory, said Mr Rawat. Increased imports are severely impacting the economic viability of many paper mills in India. To provide a level-playing field to the domestic industry, the customs duty for import of paper and paperboards should be increased and this category kept in the negative list with no preferential treatment in bi-lateral and multi-lateral trade treaties and agreements, he said.

Press Releases
Logistic bottlenecks hampering supplies for steel industry: ASSOCHAM
Sunday, February 05, 2012

Apex chamber ASSOCHAM today voiced concern over poor logistics infrastructure for supply of iron ore and coal for the steel industry, and said slurry pipelines should be included in the list of industries with infrastructure status to address bulk transportation needs of the sector. Moving iron ore and coal by pipelines in slurry form has advantages like low operating costs, higher availability and environment friendly. Existing railway lines are almost reaching a saturation point, said The Associated Chambers of Commerce and Industry of India (ASSOCHAM). While augmenting railways infrastructure is important, slurry pipelines may eventually re-invent raw material transportation for the iron and steel industry, it said in recommendations for the National Steel Policy being formulated. In 2008 the Planning Commission included pipelines for water and oil and gas eligible for infrastructure status but slurry pipelines were not, despite being recommended by the Rangarajan Committee. The chamber said road and rail connectivity at the Braganza Ghat section near Goa must be doubled as the ports capacity is being expanded manifold. Rail connectivity from Jaigarh port should be provided up to Kohlapur so that steel manufacturing units in Hospet Bellary region can benefit. The ports proposed on Karnataka coast will depend on completion of Hubli-Ankola and Talguppa-Honavar rail lines to service the steel industry efficiently. ASSOCHAM said smaller ports too need to be provided with four-lane highways so that movement of imported coking coal can be improved. Finished steel products need to be moved expeditiously from the plants to ports as dynamic market conditions place heavy strains on logistic systems to deliver products to consumers in the shortest possible time at economical costs. Development of national highway 63 and state highways connecting Bellary to Chitradurga, Hubli and Solapur will allow multi-axle load vehicles to speedily move freight of finished steel to south India, it said.