Exports from SEZs grow 67%

New Delhi: Special Economic Zones (Sezs) have contributed handsomely to the total exports of the country. According to the latest data, exports from SEZs have grown 67% y-o-y to Rs.58756.68 (USD 1244 billion) crore in the first quarter of 2010-11. During April-June period of 2009-10 exports from SEZs stood at Rs.35,013 crore (USD 741.480 billion). 

Exports from SEZs clocked a growth of over 122% to Rs. 2.20 lakh crore in 2009-10, compared to the previous fiscal. However, SEZ developers and units have expressed concern over the new draft direct rax code (DTC), which proposes to do away with income tax benefits given to new SEZ units.

A commerce ministry official said that any such rules would be counter productive as it would affect the manufacturing growth. "So far, SEZs have attracted a fresh investment of Rs. 1.66 lakh croreto create the manufacturing facilities in the county." said the government official. 

IT, IT hardware, petroleum, engineering, leather and garments are the leading exports from SEZs. According to a government official growth of exports is expected to rationalize to about 20% in 2010-11. Of the total 578 approved SEZs, 111 are operational. 

Under the SEZ Act, units in these zones enjoy 100% tax exemption on their income for the first five years and 50% in the following five years.

Basmati exporters to haul European testing lab to court for ‘biased’ report

NEW DELHI: India’s multi-million basmati industry is ready to shoot off legal notices against the Hamburg-based private testing firm, Eurofins, for its recently issued reports to buyers suggesting that Indian basmati has elevated levels (0.03%) of carbedenzum and isoprothiolane (both plant protection products or PPP). The European Commission has fixed an arbitrary maximum residue level (MRL) of 0.01 ppm.

The commerce ministry has also indicated its readiness to take up the disturbing trend upfront with the European Commission.

Although no hostile regulatory actions or rapid alert directives have been issued against Indian basmati rice by the EU as yet, exporters are intrigued by the fact that the same lab gave a clean chit to Pakistani basmati.

Eurofins said the problem of high isoprothiolane residue was unique to India because of a severe incidence of neckblast in the 2009 crop. Strangely, neckblast is spread mainly by rains but 2009 was a drought year, the worst in three decades. “The rice was probably of the best quality in recent years,” an exporter said.

“Our legal battle will be focussed on recovering costs and compensation that Indian exporters are incurring or may incur on the basis of reports issued by this laboratory,” a Delhi-based basmati exporter to Europe told ET. The case will be funded by the $30-million Basmati Development Fund.

Eurofins CEO Werner Nader flew to India last week for a few hours to discuss the issue after the industry shot off letters asking for independent lab validations and ring trial data (data on similar samples from other independent labs) to prove the lab’s claims. Mr Werner is understood to have asked for time until Wednesday to see if “Eurofins and the AIREA are able to come to an amicable agreement.”

The industry has the firm backing of the Centre in its efforts to quash what it sees as a “deliberate and wilful” attempt at disadvantaging Indian basmati rice and hurting it. Last week, commerce secretary Rahul Khullar, after a meeting with top APEDA officials, said that India would take up the issue with the EC on priority.

India sells some 290,000 tonnes of basmati (all varieties) in Europe annually, toting up a good $350 million in sales.

Another OECD country, Japan, which has a per capita rice consumption almost 20 times more than in Europe, has set an MRL of 2 ppm for isoprothiolane and 1ppm for carbedenzum against the European level of 0.01 ppm.

“The health and environment risk assessment studies that led the EC to set the MRL of 0.01 ppm needs to be accessed,” a farm ministry official said, adding: “till that study is peer-reviewed, the current MRLs constitute a technical barrier to trade and should be addressed as such.”

India's May exports rise 35 pc y/y: Govt

NEW DELHI: India's May exports rose for the seventh straight month in May, growing an annual 35 per cent to $16.1 billion, the government said on Thursday.

Imports rose 38.5 per cent to $27.4 billion, widening the country's trade deficit to $11.3 billion. April-May exports, the first two months of the fiscal year, rose 35.7 per cent to $33 billion while oil imports for May rose an annual 66.7 per cent to $8.84 billion.

Asia's third-largest economy is targeting close to 15 per cent export growth in the current fiscal year. India's exports dropped 4.7 per cent in the 2009/10 fiscal year as the global slowdown crimped demand.

Commerce Secretary Rahul Khullar, who released May's provisional trade data in mid-June, said demand has picked up for India's iron ore, oil and leather goods, but the 35 per cent jump in exports was flattered by a low level of shipments in 2009.

The trade deficit was the highest since November 2008, spurred by high demand for oil as well as iron and steel to fuel India's fast-paced industrial growth, Khullar had said.