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CII Suggests 10-Point Action to Provide a Boost to Exports Amidst the Covid 19 Pandemic
Mar 25, 2020

The Covid-19 pandemic and its global spread has brought about a major slowdown in economic activities as countries race to contain the spread of the disease through social distancing norms, closing borders and restricting people’s movement.

“The short-term impact on exports has started showing up with exporters facing liquidity crunch as customers payments are not coming through and shipments of ready goods are not able to leave the factory or lying at the port because of lock-down situation globally,” said Mr. Chandrajit Banerjee, Director General, Confederation of Indian Industry, the apex industry body of the country. Faced with the challenge on export front, industry is looking for support from the Government, CII said in its representation to the government today.

Against this backdrop CII suggested a 10-point action plan to provide the much needed boost to this sector. These include:

First, export consignments which are ready for shipment should be allowed to be transported from the manufacturer’s factory or warehouse to the Customs facility as an exemption and such consignments should clearly show on the accompanying Invoice and e-way Bill that the goods are for an export shipment meant for a foreign buyer.

Second, as there are challenges in filing bill of entry and making duty payments within the Statutory time period, it has been suggested that a one-time relaxation should be provided by the Government by way of extending the time limit for filing bill of entry and payment of customs duty.   Also given lockdown and financial hardship which Companies are facing, it is desirable that deferred payment of duty is continued for the month of March 2020 and may be extended till June 2020.

Third, the Interest Subvention Scheme of 5 % should be extended to all exporters; extra duty drawback of 3% be extended for six months, expedite GST refund and extend moratorium on loan, interest payments, utility payments and declaration of NPAs by banks by at least six months are required to overcome the crisis.

Fourth, 100% or maximum number of bills of entries should be processed based on self-declaration of importer and through the Electronic Risk Management System and in case of any deficiencies, importer undertaking should be accepted, and cargo be released. This would ease supply chain process by ensuring speedy clearance of cargo, the release said.

Fifth, considering COVID-19 restrictions and the fact that only the procedural part of obtaining/issuance of Export Obligation Discharge Certificate (EODC) by DGFT is pending, the Customs Department should not go for encashment of Bank Guarantee for at least another six months, i.e. until September 30, 2020.

Sixth, in the current scenario, the import container clearance time has gone up and has resulted in increase in shipping line demurrage and container freight station (CFS) charges. These charges should be waived. Similarly, for export containers where the bill of ladings (BLs) are not released in time, the applicable late BL fees should be waived till the clearance time comes back to normal.

Also as courier services may get affected during this crisis, sending the original shipping documents by courier could be difficult and so the Customs authorities, shipping lines and CFS should give some relaxations during this time to the exporters and importers by way of relaxing the requirements for originals or waive the demurrage charges resulting from delayed document receipts.

Seventh, there is a need to identify few ports and airports where exports will be handled with priority. In addition, to facilitate movement of goods, self-certified export documents should be considered as valid.

Eighth, banks need to identify branches in sufficient numbers which would give priority to exporters process all export documents on an urgent basis. Banks should also consider sanctioning and releasing to companies executing export contracts, at least 20% of contract value as special cash credit funding, to tide over cash flow issue.

Ninth, packing credit be increased by at least 25% for exporters and the threshold for returning export packing credit be increased from 180 days to 360 days.

Tenth, CII strongly recommends that all export benefits as per current Foreign Trade Policy should be continued until 30th June 2020 or announcement of new Foreign Trade Policy.

25 March 2020
New Delhi

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