Govt urged to provide 200% tax deduction on exporters’ expenditure
The Federation of Indian Export Organizations (FIEO) has called for creation of an Export Development Fund with a corpus of minimum 0.5% of preceding year’s exports, pointing out that its members need support for aggressive marketing.
The Rs.200 crore support given under Market Development Assistance (MDA) Scheme of Department of Commerce for promoting exports to US$460-$470 billion is just a drop in the ocean, FIEO President Dr A. Sakthivel has told Finance Minister during a pre-Budget meeting on 24 Nov 2022.
When global demand is declining, it becomes all the more necessary to go for aggressive marketing. However, most of the Indian companies are cutting their marketing expenditure in view of contraction, he said.
“This may impact the country as if we are not visible in the market, we will not get whatever little demand there is and may not exploit it when the global situation improves,” he said.
“SMEs exporters are being provided marketing support by most developing and developed countries for providing marketing exposure,” he said, adding that the Indian Government support for export marketing is nominal.
Dr Sakthivel also highlighted Rupee’s performance against the US dollar, saying it is affecting Indian export competitiveness
India Rupee is one of the best performing currencies in the World. While it depreciated against the US dollar, the decline was not as steep as most of the global currencies.
“This is a matter of pride for every Indian and a reflection of the vibrancy of our economy under your able leadership. However, this is affecting exports competitiveness,” he said.
The exports sector thus requires a little more support and our request may be looked into from this perspective.
Moreover, the Government may provide a 200% tax deduction on the expenditure made by the exporters for overseas marketing. Such a move will encourage and help the showcasing of Indian products overseas.
FIEO has also called for development of Indian Shipping line of global repute, pointing out that India’s outward remittance on account of transport services is increasing year after year.
“We remitted US$82.65 billion as transport service charge in 2021. When we are looking at increasing our international trade to US$2 trillion in an economy of US$5 trillion, the outgo on transport services will increase to US$150-$200 billion.
“If an Indian Shipping line gets only 25% of such a market, we can save US$40-$50 billion every year.
“While we are disinvesting Shipping Corporation of India, we should encourage the private sector, through tax and fiscal incentives to come forward to set up a global Indian Shipping Line to exploit the ready market available to them,” Dr. Sakthivel elaborated. fiinews.com
