India to cut export deal costs by Rs 21bn
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New Delhi: India on Tuesday announced a slew of measures, including round-the-clock customs clearance at eight ports and reduction in levies, that will cut export transaction cost by nearly Rs 2100 billion ($466.66 million), making the country's overseas trade more competitive.
Finance Minister Pranab Mukherjee released a report of the task force on transaction costs that has made 44 recommendations aimed at improving competitiveness of Indian exports.
The government has agreed to implement 32 of the 44 identified issues that are related to various ministries and departments, said Minister of State for Commerce and Industry Jyotiraditya M. Scindia.
"Of these, 21 issues have been implemented and another two are likely to be implemented in a couple of months. The remaining issues are under the process of examination and consultations for implementation," Scindia said.
"It is expected that implementation of 23 issues is likely to mitigate the transaction cost by approximately Rs 21 billion. Permanent reduction of transaction cost through these initiatives will have a long term positive impact on the competitiveness of India's exports," Scindia, who chaired the task force, added.
The major recommendations that have been implemented include, round-the-clock customs clearance at eight ports - Visakhapatnam, Kolkata, Jamnagar, Mangalore, Jawaharlal Nehru Port Trust (Navi Mumbai), Mumbai, Bhubaneswar and Chennai - and reduction in various levies.
Booking charges for the foreign currency have been reduced from Rs 750 per transaction to Rs 400-500 per transaction.
Delhi International Airport has reduced the charges levied for screening express cargo and courier shipments from Rs 6 to Rs 1.65 per kg for the export courier at its Express Courier Terminal at Indira Gandhi International Airport.
Leading banks have agreed to extend pre-shipment credit in foreign currency at London Interbank Offered Rate (Libor) plus 2 per cent with no additional charges levied.
The Reserve Bank of India (RBI) has instructed all the commercial banks to ensure that post- shipment credit is available at prescribed rates up to 180 days as stipulated in case of overdue bills.
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