[Budget 2020] New NIRVIK scheme to provide higher export credit disbursement

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[Budget 2020] New NIRVIK scheme to provide higher export credit disbursement

[Budget 2020] New NIRVIK scheme to provide higher export credit disbursement

Industry News
Feb 01,20

FM Nirmala Sitharaman proposes allocation of Rs 27,300 crore for industry and commerce in FY21; and raises Customs Duties on number of products

[Budget 2020] New NIRVIK scheme to provide higher export credit disbursement

Mumbai

Finance Minister Nirmala Sitharaman has proposed a new scheme Nirvik (Niryat Rin Vikas Yojana) for exporters in Budget 2020. This will have lower premiums and a faster claims settlement. Refund to exporters the duties levied including electricity and VAT which have been not refunded. The scheme, being prepared by the Commerce Ministry, will be launched this year itself. A total allocation of Rs 27,300 crore for development of industry and commerce in FY21, said FM.

NIRVIK will offer high insurance cover, lower premium, simplification of claim settlement through the digital network. Under the Export Credit Insurance Scheme (ECIS), the insurance guaranteed could cover up to 90 per cent of the principal and interest. This premium can be reduced further.

Under the scheme, also called the Export Credit Insurance Scheme (ECIS), the insurance guaranteed could cover up to 90 per cent of the principal and interest.

“The ministry has also proposed to subsidise the premium under the scheme that has to be paid by exporters of certain key sectors. The Export Credit Guarantee Corporation currently provides credit guarantee of up to 60 per cent loss. The development assumes significance as exporters have raised concerns over availability of credit,” said a PTI report.

The country's exports contracted for a fifth month in a row by 1.8 per cent in December 2019 to $ 27.36 billion. During April-December 2019-20, exports slipped 1.96 per cent to $ 239.29 billion, imports declined 8.9 per cent to $ 357.39 billion, leaving a trade deficit of $ 118.10 billion.

The Budget 2020 has proposed turnover of Government e-Marketplace (GeM) to be taken to Rs 3 lakh crore. “Each district will have to be developed as an export hub. The governments e-marketplace has a lot of opportunities for SMEs,” said FM.

To decrease imports and promote domestic manufacturing, Budget 2020 has proposed increase in Customs Duties on number of products. Customs duty raised on footwear to 35 per cent from 25 per cent and on furniture goods to 25 per cent from 20 per cent. Basic customs duty on imports of news print and light-weight coated paper reduced from 10 per cent to 5 per cent. Customs duty rates revised on electric vehicles and parts of mobiles. Five per cent health cess to be imposed on the imports of medical devices, except those exempt from BCD.

The Budget has proposed lower customs duty on certain inputs and raw materials like fuse, chemicals, and plastics and higher customs duty on certain goods like auto-parts, chemicals, etc. which are also being made domestically.

The Customs Act will be amended to enable proper checks of imports under FTAs. Rules of Origin requirements to be reviewed for certain sensitive items. Provisions relating to safeguard duties to be strengthened to enable regulating such surge in imports in a systematic way. Provisions for checking dumping of goods and imports of subsidized goods being strengthened. Suggestions for reviews of exemptions from customs duty to be crowd-sourced.