Defer EU carbon tax for MSMEs by 3 years, new PLI, launch ecommerce coverage: Parliamentary panel to govt

The Standing Committee on Commerce additionally really helpful {that a} sturdy mechanism to help and equip MSMEs to counter the antagonistic results of CBAM should be carried out on precedence foundation.

“The committee notes that the Indian producers within the MSME sector could not have the monetary assets to make crucial modifications to counter the CBAM,” the panel mentioned.

Underneath the CBAM, non-EU metal producers are required to report direct and oblique emissions. The monitoring of such merchandise started on October 1. CBAM will translate right into a 20-35% tax on choose imports into the EU from January 1, 2026. From that date, EU importers must declare and buy CBAM certificates to cowl the emissions related to producing imported metal merchandise.

Whereas being optimistic in regards to the prospect of attaining the $300 billion goal by 2030 for engineering exports, the committee expressed concern over potential hindrances posed by tariff and non-tariff boundaries raised by the US and EU, which may impede progress.

“To guard the home business from the imposition of further tariffs beneath Part 232 of the Commerce Growth Act of 1962 and non-tariff boundaries within the type of CBAM, the committee recommends that the federal government have interaction on the highest stage with USA and EU respectively to resolve the matter,” it mentioned.New PLI schemes
The committee recommends that the scope of the manufacturing linked incentive (PLI) scheme could also be expanded to incorporate different sectors with excessive employment potential resembling chemical substances sector and labour intensive sectors like leather-based, attire, toys, jewelry and handicrafts.It additionally emphasised the requirement of PLI scheme “particularly tailor-made to bolster the chemical business” within the nation.

For this, the panel proposed the institution of an institutional mechanism like a cell beneath the commerce and business ministry to interpret market entry boundaries, home laws, and associated points from the attitude of Indian exporters, thereby contributing to a extra knowledgeable and strategic strategy to worldwide commerce.

FTAs, Russia
Expressing concern that India’s attire exports are closely concentrated in a restricted variety of markets, the committee really helpful diversifying from the US and EU to discover new locations via Free Commerce Agreements (FTAs) and use market intelligence to anticipate import calls for and determine rising markets.

As per the report, 63% of India’s exports is just in 20 merchandise, which is a really small basket. The committee advocated diversification of export basket, particularly shifting from cotton-based exports to Man-Made Fibers (MMF) via investments within the MMF worth chain, together with fiber manufacturing, yarn manufacturing and cloth manufacturing.

The committee urged the federal government to contemplate granting duty-free entry for all MMF-based uncooked supplies to facilitate cost-effective imports for the manufacturing of competitively priced MMF clothes.

It additionally really helpful the recalibration of current FTAs to safeguard in opposition to damaging commerce balances with companion international locations to optimize the benefits of FTAs and guarantee a balanced commerce relationship for the nation.

To deal with the priority relating to the classification of Russia as Restricted Cowl Class–I (RCC-I), the panel instructed the federal government a evaluate of this classification to determine potential antagonistic results on exporters and take crucial steps together with an understanding of regulatory challenges and potential boundaries to entry, to mitigate any damaging impression thereby making certain conducive atmosphere for exporters partaking in commerce with Russia.

Ecommerce coverage
Involved over the extended delay in launching the nationwide e-commerce coverage, the Standing Committee mentioned it “strongly recommends” the expedited introduction of the coverage to deal with the present challenges and foster a conducive atmosphere for the expansion of e-commerce exports.

It additionally pushed for the provision of pre-shipment and post-shipment export credit score for e-commerce exporters.

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