'India's foreign trade needs tax sops, support for R&D'

As Finance Minister Nirmala Sitharaman prepares to present her first Union Budget on July 5, trade associations involved in import and export want the government to take several steps to boost India's cross border trade.

 

Trade Promotion Council of India (TPCI) in its budget recommendation has said that the government should incentivise the exporters whose "geographical diversification is more, and not concentrated in terms of outreach and extension product and country wise".

 

It also sought incentives for thrust sectors like furniture and electricals, where India has a huge competitive advantage in exports.

 

TPCI, in a statement said that the government should permanently exempt goods procurement under certain export promotion schemes from the Integrated Goods and Service Tax (IGST) and compensation cess. Currently the exemption exists till March 31, 2020.

 

Emphasising on the need of research and development (R&D) in the economy, the trade associations said that innovation should be encouraged by the government.

 

According to the Engineering Exports Promotion Council (EEPC) of India, the budget should do away with any duty on imports made for R&D in the country.

 

Research & Development is the backbone for sustained growth of any industry. This will help to develop new products, and compete with other international players.

 

Currently, any import for R&D is subject to payment 5 per cent duty with lot a paper work and approvals. This actually hampers the R&D of any Organization, EEPC said in its budget recommendations.

 

It suggested that there should be no import duty for R&D purposes so that more and more investment can take place in this sector.