EXIM Policy 2002-07 Is About Transparency

It goes to the credit of the Central Government that it has made a conscious
effort to bring about transparency in export/import operations in its EXIM
Policy 2002-07 bringing a great deal of relief, particularly to the IT industry,
whose efficient running depends on how fast the documents move at the
export/import counters.

The focus of the new EXIM Policy is to make the procedures of exports and
imports simple, implement electronic data interchange (EDI) across all ports and
bring the transaction time down to international levels.

These are highly progressive measures and can bring about major changes in
the way export/import is handled today. But these measures have to be executed
in the right spirit.

More often than not, the good intentions of the Government lie only on paper
because the people who are supposed to implement these are in the dark about the
objectives that their paymaster wants to achieve. The Government needs to take
immediate steps to educate those manning the export/import counters on why it is
important to keep the processes transparent as per the new policy.

Let’s admit it. Government employees are used to a work culture where
greasing the palm is a routine affair for the export/import documents to go up
the hierarchy. Whatever may be the policy changes, unless the Government takes
pro-active measures to enlighten its employees on the importance of executing
these changes, the policy would only remain on paper.

Yes, under the EDI much of the data will not be on paper because here the
machines take over its processing. But again, these machines are manned by
people who have to understand the good intentions of the Government to make the
country’s economy a globally competitive one and contribute actively towards
achieving the Government’s objectives.

The other major achievement of the new EXIM Policy is that it has prepared
the grounds for the country’s IT manufacturing sector to face the zero-duty
regime by 2005 under the WTO Agreement. Currently, import duties on capital
goods and raw materials used in hardware manufacturing are considerably higher
than the finished goods.

The EXIM Policy 2002-07 has brought about the corrective measures by
modifying EOU/EHTP/SEZ/STP schemes and the export obligations of the companies
operating from these zones. These measures should help manufacturers face the
zero-duty regime without burning a hole in their pockets.

That the Government has finally recognized the country’s vast potential of
technology exports of embedded software is indeed noteworthy. This is the
reason, it has provided for duty-free import of equipment costing up to $10,000
for testing of the technology in this greenfield sector.

Finally, by providing for a higher rate of depreciation, at 100% in three
years, to all the machines and peripherals used by companies in EOU/EHTP/STP
zones, the Government has enabled these to be donated to schools, colleges and
hospitals.

This is a positive step in the EXIM Policy towards increasing the PC
penetration in the country and highly commendable.

Sylvester Lobo