Pre-budget: the FIEO is looking for an Indian shipping company in a context of rising freight costs and heavy dependence on foreign cos
At its pre-budget meeting with Finance Minister Nirmala Sitharaman on Friday, the exporters’ umbrella body said Indian shipping companies had a “very minor share” in India’s world trade.
âAs the Shipping Corporation of India is in the process of being divested, we must encourage the big Indian entities to create a world-famous Indian shipping company,â said A Sakthivel, President of the FIEO.
The federation said that these shipping companies, even though they account for 25% of total turnover, can save $ 30-40 billion per year and also reduce India’s dependence on foreign shipping companies. .
“The tax advantage enjoyed by shipping companies in some countries can be seen as encouraging them to register such vessels in India,” said FIEO.
Sakthivel said that India’s remittances for transportation services are increasing year by year.
“We have turned over around $ 65 billion in transportation services in 2020 and given the abnormal increases in freight in 2021, the figure is expected to exceed $ 100 billion,” he said.
According to the federation, spending on transportation services will rise to 150-200 billion dollars when the country seeks to increase its international trade to 2000 billion dollars in an economy of 5000 billion dollars.
Container manufacturing requires a special type of steel that provides a competitive advantage for China which manufactures over 80% of the world’s containers. We need to encourage domestic container manufacturing by providing tax benefits for domestic container manufacturing
The FIEO has also pushed for a âDouble Tax Deduction Scheme for Internationalizationsâ to allow exporters to deduct from their taxable income double the eligible expenses incurred for approved overseas activities, including market preparation, market exploration, market promotion and market presence.
“A cap of $ 5,000,000 can be set under the program so that investment and tax deduction are limited,” suggested the EIFT, citing the example of Singapore which offers a similar facility to its SME units for aggressive marketing.
Regarding services, the EIFE said the sector is not receiving any support as the benefits of the service export program from India are also no longer available, and the travel and tourism sector has been severely affected by due to the pandemic and should be encouraged.
“Mode 2 of the services (service provided to a foreign national in India paid in free foreign currency) did not benefit from either an IGST exemption or a refund of the accumulated input tax credit,” said he declared.
FIEO also requested the restoration of the import facility for trimmings and embellishments, as exporting MSMEs mainly source raw materials from the domestic market and only import small batches of trimmings and embellishments. .