• Services rendered abroad and charged on exports from India to be exempted from service tax. At least Service Tax on commission payable to the foreign agents will not be payable anymore under any circumstances.


• The limit for duty free import of samples increased to Rs.1, 00,000 from Rs.75, 000.


• Encouragement to agro exports through VKUY. ‘Vishesh Krishi and Gram Udyog Yojana’ (VKGUY) is being expanded. Although we have recommended silk to come under VKUY it has not been included so far. The offices of the Ministry of Textiles have also recommended our case favorably and we hope it is included in VKUY in the near future.


• 16 new countries including 10 former CIS countries are being included under the Focus Market Scheme (FMS).


• DEPB(Duty Entitlement Pass Book) Scheme stands extended for another year upto May 2009. DEPB will be replaced by new scheme in consultation with the exporters.


• Import of spares, tools, spare refractories for all the existing imported plant and machinery would also be now allowed under Export Promotion Capital Goods (EPCG) Scheme.


• Income tax benefit to100% EOUs has been extended by Government.


• Refund of service tax on almost all the services which are directly relatable to export production and supply.

Silk exports for the period ended April-December amounted to Rs. 1927 crore as against Rs.2464 crore during the same period last year. This would mean a decline of 22% in terms of Rupee. Exports for the year ending March, 2008 would have crossed only US $ 640 million, which means exports actually declined by 14% in dollar terms.

The reasons are not difficult to write about. Exports to USA declined by 37% and EU by 18%. As all leading countries comprising more than 90% of exports, only UK and Morocco show positive exports over the previous year period exports. This means to say we are up against the hill. We have suggested an increase in Duty Drawback for silk exports but sadly this has not been considered in the new Exim Policy.

There are no positive response for the export promotion activities we propose to do in this year. I can understand your predicament in not venturing out and taking the risk in marketing activities at this juncture but I accept that there is going to be a turnaround very soon. Apart from waiting for better time, we hope we may surely expect good marketing conditions soon around the world.

Council’s award function which was fixed for 8th May 2008 at Bangalore has been postponed due to elections. We will keep you informed about the new Award Function date soon.

With best regards,

Yours sincerely,

T.V. Maruthi
Chairman