New Delhi : Indian exporters Friday cheered the commerce ministry’s move to enhance the rate at which exporters make up the costs of local duties, called duty entitlement passbook (DEPB) rates in exporting parlance.
Indian exporters had been facing huge difficulties ever since the rupee’s appreciation against the US dollar started. The sectors worst hit by this appreciation are IT and IT-enabled services, textiles, leather, sugar and pharmaceuticals.
On Thursday, the commerce and industry ministry enhanced the DEPB rates by three percent for nine sectors, such as textiles and readymade garments, leather products, handicrafts and engineering products, while for others it was enhanced by two percent.
“The increased (DEPB) rates effective from 1.4.2007 will provide some relief to the employment generating sectors,” G.K. Gupta, president, Federation of Indian Export Organisations (FIEO), said.
“Large scale retrenchment in employment was on the way as exporters were worst hit by the impact of rising rupee. Timely announcement of the export package by the government has not only avoided such retrenchment but it would help to generate more employment and sustain the export growth,” Gupta said.
However, he reiterated that relief from service tax should also have been announced simultaneously which he says is eroding exporters’ profitability.
The level of appreciation of the Indian rupee, which strengthened by 8.35 percent during the fist half of this year, is second only to that of the Brazilian currency, which appreciated by 9.28 percent during the same period, according to the Associated Chambers of Commerce and Industry of India (Assocham).