The proposed phase-out of DEPB (Duty Entitlement Pass Book) scheme with effect from 30 June this year has rung alarm bells for the Indian exporters. The hue and cry that the exporters have raised was only expected; perhaps even inevitable, for, the exporters have been enjoying its benefits for several years and any withdrawal has to attract a lot of criticism and dark, even presumptuous, prophecies.

The Export Scenario

India Exceeds Export Target for 2010-11

I think any assessment on the need or the absence of DEPB needs to be assessed with reference to our export performance. Indias exports zoomed to an impressive $245.9 billion in 2010-11, registering an increase of 37.6% over its previous year, surpassing the Governments declared target of $200 billion. Alongside, the imports stood at $351 billion and the trade deficit was at $104.8 billion, which is slightly higher than the provisional forecast of $104.4 billion. In fact, the trade deficit was highest in the month of August for the last 23 months, later moderated on the back of stronger-than-expected exports, which helped narrow the current account deficit in the quarter through December to under 2.5 per cent of gross domestic product (GDP), lower than 4.3 per cent in the previous quarter. Commenting on the export performance, the FIEO President, Ramu S. Deora said that India's diversification strategy is paying off. Asia, Latin American and Africa are the main contributors to this growth and the signing of CECA and FTA with Asian countries is set to raise Asia's share. He, however, expressed his concern over the increasing cost of credit and infrastructural bottlenecks, which may have a bearing on Indian exports in the next couple of years.

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Here 'I' refers to author; he shares his comments on the effect of DEPB on Indian Exports