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In the lead-up to the 2024 budget, the Federation of Indian Export Organisations (FIEO) presented a list of proposals to Finance Minister Nirmala Sitharaman, advocating for measures to enhance the competitiveness of Indian exports.
A central demand was the creation of an Indian shipping line. Ashwani Kumar, president of FIEO, highlighted the rising cost of transportation services for Indian exports, stating that India remitted over $109 billion in 2022 alone.
With export targets aiming for $1 trillion, Kumar projected this figure to reach $200 billion by 2030. He argued that a 25% share by an Indian shipping line could generate annual savings of $50 billion.
The exporters also sought a reduction in import duties on materials like wet blue leather, a crucial input for the leather industry. They appealed for an extension of the interest equalization scheme, which provides subsidies to exporters, with higher incentives for eligible products.
This scheme, currently valid until June 30, offers a 2% subsidy for 410 specified products and a 3% subsidy for all exporters from Micro, Small, and Medium Enterprises (MSMEs).
Furthermore, FIEO requested a duty drawback for platinum jewelry, which would enable exporters to recover duties paid on imported raw materials.
Separately, Nasscom, the industry body for India's software services sector, advocated for a simplified transfer pricing regime to ease the burden on businesses and enhance India's attractiveness as a destination for global capability centers.
Nasscom also sought clarity on the government's proposed deep tech policy, which aims to foster innovation in emerging technologies. The organization presented a study on safe harbor rules, arguing for raising the threshold limit for international transactions from ₹200 crore to ₹2,000 crore, which would allow more companies to benefit from the tax-efficient regime.
Nasscom also urged for a faster process for renewing advance pricing agreements, which help companies determine the appropriate transfer prices for cross-border transactions.
Source: Budget 2024: 25% share by Indian liners could save $50 billion annually, says FIEO