UCPMA submits memo to Joint Director Foreign Trade Ludhiana

Ludhiana, March 6, 2013: A deputation of United Cycle and Parts Manufacturers Association (UCPMA), Ludhiana under the leadership of president Gurmeet Singh Kular on Wednesday submitted a memorandum to Darshan Singh, Regional Joint Director, Foreign Trade, Ludhiana.

The memorandum reads;

“Grant of an Import authorisation for duty free replenishment of inputs has undoubtedly proven to be a very important tool in bringing the Indian manufacturer exporter / merchant exporter at par with their global competitors both price wise and quality wise. But the validity period granted for utilising the said authorisations which recently has been further reduced to 18 months; has always been contentious with exporter because of the inherent problems in utilising the same viz. involvement of heavy finance for one, exchange rate fluctuations and volatility in global commodity /raw material prices due to various factors, climatic change being a major reason, are beyond not only of individual exporter’s control but are beyond the influence of government and it’s regulating authorities. The very fact that the validity of such import authorisations has been further reduced from existing 24 months to 18 months is totally impractical it should be restored to at least to 24 months if not more, immediately.

Another remedial measure which can be taken to make this scheme more exporter friendly and of doing away with validity period contention of DGFT office insisting 18 months is sufficient and exporters on the contrary arguing that even the erstwhile 24 months were insufficient would be to do away with requirement of applying for DFIA on pre-export basis.

As we all know export under DFIA is done as per prefixed SION for the export product and import entitlement is also as per the SION for the said product; it should not be binding for exporter to apply for DFIA pre-export instead they (exporters ) should have the option to export under DFIA against declaration of the scheme and corresponding SION of the export product on the shipping bill itself and should have the option for applying for DFIA clubbing the said shipping bills post realisation; even a 18 month validity for such an authorisation will do because unlike in the case of existing DFIA scheme where exporter has to apply pre-export and wait for inward remittance; he shall have the additional flexibility in applying post realisation basis and the issue of validity shall be resolved to the satisfaction of all concerned.

The facility of applying on pre-realisation basis for Chapter -3 scheme SCRIPS; literally snatched away with the introduction of e-BRC should be immediately restored; it was a good facilitation measure which helped exporters and shall continue to be so if status quo of applying pre-realization against LUT/Bank guarantee is restored. Hope the authorities concerned are working for restoration of the said facility.   

The transferability in case of duty scrips like SHIS (status holder incentive scheme), SFIS (served from India) and Agri Infra structure schemes should be less stringent; the same should be allowed to be transferable as other scrips permitting the import of inputs of exported product also against the same; this shall not take away the benefit ultimately accruing  to the infra structure sector as initially intended under the FTP, as the exporter shall have the entitlement under these schemes only after physical exports and the duty credit shall ultimately be utilised for import of machinery or inputs; eventually strengthening the national infrastructure to strengthen the thrust to improve export performance of the country.

Lastly we have failed in understanding the logic behind RLA’s insistence on realisation value for applications under SHIS (Status Holder Incentive) which is just 1% of exports of specific goods; yes monitoring the realisation after the said scrips has been issued is understandable for that realisation date of the export proceeds should suffice. Further the percentage should be increased to 2%.

It is most humbly further added that under the scheme FPS  (Focus Product Scheme, against export of Complete Bicycle 5% duty credit is permitted whereas for Bicycle Parts only 4% is permissible; why this discrimination, it is requested that 5% should also be allowed against export of bicycle parts also, as this shall boost the tiny sector engaged in manufacturing the said parts and it shall also be a support for this sector reeling under the Chinese ruthless onslaught in this sector on price front.

One chance should be given to the exporters who have not taken benefit or delayed in taking FPS (Focus Product Scheme) because of time-bar. Government should allow to file the pending claims for some specific time period for the benefit of the exporters.

Recently government has scraped all in-house stuffing of the exporters / manufacturers. The permission is now being granted by the central excise office instead customs, this is given to only the manufacturers and not to Merchant Exporters. We request you to allow factory stuffing to merchant exporters also and  the process of taking permission should be simplified.   

India being major producer of bicycle and parts and Ludhiana being specific city for the production of these items. The cheap imports of bicycle and parts are posing the major threats to the existence of the industry. It is our humble request to increase the import duty on Complete Bicycles to 50% and on parts to 40% so that the home industry may not face closure.

We are certain if the above measures are incorporated the same shall definitely pave way for a more confident exporter determined to do better knowing the authority is with him and can be depended upon.”