Wool exporters seek restoration of old duty drawback rates

Chandigarh: The Wool and Woollens Export Promotion Council (WWEPC) has urged the textiles ministry to restore the old rates of duty drawback on wool products to reduce exporters' losses due to forex rate fluctuation, reports PTI.

With exporters unlikely to achieve the $630 million target for wool exports in 2010-11, WWEPC chairman Ashok Jaidka told PTI: "We have demanded from ministry of textiles to revert to earlier rates of duty drawback, which can give some cushion to wool exporters to contain their losses."

In September, the Centre had slashed the rate of duty drawback on wool products, including wool tops, woollen yarn and woollen fabric, in the range of 5% to 20%, in line with its policy to reduce the fiscal incentive provided to a host of export sectors during the global economic slowdown.

According to Mr Jaidka, the duty drawback rate on woollen items like sweaters, overcoats and wind-cheaters was reduced from 10% of the Free On Board (FOB) value to 7.5%.

Moreover, appreciation of the rupee against the dollar in the past few months also made a dent in the revenue realised from exports, said Mr Jaidka.

According to the latest data, the country's wool and wool-blended exports observed a sharp 26.42% fall during the first four months of the current fiscal. Exports were valued at Rs596.71 crore in April-July, 2010, as against Rs809.01 crore in the corresponding period last year.

The main reason cited for the fall in exports was the late placement of export orders and uncertainty in exchange rates. "Our bulk buyers, especially in the US, placed late orders this year in anticipation of appreciation of the rupee against the US dollar in order to claim discounts from us. It was the main cause behind the dip in exports volume," he said.

The bulk of the country's wool products are exported to the US and Europe.

Textiles minister Dayanidhi Maran had also expressed concern over the sharp fall in wool exports at a meeting to review export performance earlier this month.

In the face of falling exports, the textile industry has indicated it is unlikely to achieve the export target of $630 million for 2010-11. "It may be a bit difficult to achieve targeted exports this fiscal, though we will put in extra efforts to go for it," he said.

Total wool exports stood at Rs2,015.82 crore in 2006-07, but fell to Rs1,783.13 crore in 2007-08. Wool exports later rose to Rs2,199.50 crore in 2008-09 and then further to Rs2,262.73 crore in 2009-10.

On the advice of Mr Maran, the WWEPC will participate in trade fairs in Italy in December, Mexico in January, 2011, Moscow in February, 2011, and Cairo in March, 2011, with the aim of boosting export volumes.
 

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Personal finance Friday

Sundaram MF launches Sundaram Fixed Term Plan-AQ; Fidelity MF unveils Short Term Income Fund; Sundaram MF floats Sundaram Fixed Term Plan-AR; HDFC Life launches single premium ULIP ProGrowth Maximiser; IndiaFirst Life Insurance introduces 'Ask Apply Get' service

Sundaram MF launches Sundaram Fixed Term Plan-AQ

Sundaram Mutual Fund has launched Sundaram Fixed Term Plan-AQ, a close-ended income scheme.

The investment objective of the scheme is to generate income with minimum volatility by investing in debt and money-market securities, which mature on or before the maturity of the scheme.

The scheme offers growth and dividend (payout) option. During the new fund offer (NFO), the units will be offered at face value of Rs10 per unit. The scheme opens on 19th November and closes on the same day. The minimum investment amount is Rs5,000. The minimum targeted amount is Rs1 crore for the scheme.
CRISIL Short-Term Bond Fund Index is the benchmark index. The scheme will be managed by Dwijendra Srivastava, head-fixed income securities.

Fidelity MF unveils Short Term Income Fund

Fidelity Mutual Fund has launched Fidelity Short Term Income Fund, an open-ended income fund.

The investment objective of the scheme is to generate reasonable returns primarily through investments in fixed-income securities and money-market instruments.
During the new fund offer (NFO), the units will be offered at face value of Rs10 per unit. The NFO opens on 19th November and closes on 30th November.

An exit load of 0.5% will be charged if units are redeemed within six months from the date of allotment. The scheme offers growth and dividend option. The minimum investment amount is Rs5,000.

CRISIL Short Term Bond Fund Index is the benchmark index. The scheme will be managed by Shriram Ramanathan.

Sundaram MF floats Sundaram Fixed Term Plan-AR

Sundaram Mutual Fund has launched Sundaram Fixed Term Plan-AR, a close-ended income scheme.

The investment objective of the scheme is to generate income with minimum volatility by investing in debt and money-market securities, which mature on or before the maturity of the scheme.

During the new fund offer (NFO), the units will be offered at face value of Rs10 per unit. The NFO opens on 19th November and closes on 26th November. The scheme offers growth and dividend (payout) option. The minimum investment amount is Rs5,000. The minimum targeted amount is Rs1 crore for the scheme.
CRISIL Short-Term Bond Fund Index is the benchmark index. The scheme will be managed by Dwijendra Srivastava-head-fixed income securities.

HDFC Life launches single premium ULIP ProGrowth Maximiser

Private insurer HDFC Life has launched a single premium unit-linked insurance plan (ULIP) 'ProGrowth Maximiser', with multiple investment options.

ProGrowth Maximiser provides three investment options-highest net asset value (NAV) guarantee, capital guarantee and free asset allocation. The plan provides customers the flexibility to choose from multiple investment options as per their needs and risk appetite. The plan has both the limited underwriting and the fully underwritten versions.

IndiaFirst Life Insurance introduces 'Ask Apply Get' service

IndiaFirst Life Insurance has launched 'Ask Apply Get' (AAG)-a customer friendly process to buy life insurance quickly in the most hassle free manner.
Through this initiative, customers will be able to get life insurance cover almost instantly, without the hassles of long waiting period, follow ups, heavy documentation and medical checkups.

The concept of AAG policy sales and issuance from across the bank branch counters brings about a new dimension in life insurance distribution. This concept challenges the hitherto push method of selling insurance (a customer needs to be sold a policy) to developing a new paradigm of generating pull (a customer coming and asking for an insurance policy and getting it in the fastest and most hassle free way).

IndiaFirst has launched its AAG process pan India across all 4,500 branches of Bank of Baroda and Andhra Bank.

"Traditionally, the task of selling insurance lies with the sales person. We are now attempting a different approach where we are inviting the customer to take a step forward and ask for the product, on the premise that if the process of buying is made simpler and faster the pull for the product will definitely increase. We are looking at the 1,00,000 policies mark with an average premium of Rs25,000 through this process by the end of the financial year," added Dr P Nandagopal, managing director & CEO, IndiaFirst Life Insurance.

Customers, who fulfill the eligibility criteria, can avail the benefits of the AAG process. It is an easy and customer-friendly process wherein on submission of the duly filled proposal form, the requisite premium cheque and having completing the call centre call, customers walk out with their plan documents handed over the counter.

At present, the AAG process is available for the IndiaFirst Smart Save Plan and the IndiaFirst Young India Plan. The company plans to soon offer all its products through this process.
 

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Decision on nod only after formal application: Govt to Cairn

New Delhi: The oil ministry was today firm that it will consider approval for the $8.48 billion Cairn-Vedanta deal only after UK-based Cairn Energy makes a formal application for transfer of control in all its 10 properties in the country, reports PTI.
Cairn's current application seeking government nod for the deal has left out the three producing properties, including the giant Rajasthan oilfields.

The government's insistence that a formal application must be made for each of the 10 properties, conveyed through a letter to Cairn this month, may delay the approvals till January-February next year.

The ministry had earlier indicated that approvals could come by this year end.

"We wrote to (Cairn Energy and Cairn India) a few days back reminding them of contractual requirement of seeking government consent in all the properties," oil secretary S Sundareshan said today. "We cannot consider their case unless they comply with this contractual requirement."

The Edinburgh-based firm, in its 16th August announcement of sale of its 40% to 51% stake in Cairn India to London-listed Vedanta Resources for as much as $8.48 billion, did not say the deal was conditional on government approvals.

However, on being shown the relevant provisions of the contracts for exploration it has with the government, Cairn Energy about a month later made an application for permission that left out all of its three producing properties including its mainstay 6.5 billion barrels Rajasthan block.

"This position is not acceptable to us. They need to apply for all the blocks," Mr Sundareshan said.

Cairn has so far maintained that it is not contractually bound to seek approval for sale of shareholding in the Indian unit in the Rajasthan block, the Cambay basin gas field and the eastern offshore Ravva oil and gas fields. But the latest missive from the ministry is certain to force Cairn to revise its stand and formal applications are expected sometime next week.

Though the company looks set to concede ground on requirement of prior government consent, Cairn is unlikely to yield pre-emption rights to state-owned Oil and Natural Gas Corporation (ONGC), which partners its Indian unit in most of its properties including the Rajasthan block.

The pre-emption is a natural extension of the requirement of government consent and the same has been upheld by law ministry and the Solicitor General of India, the nation's second highest law officer, in their separate opinions on the Cairn-Vedanta deal.

Mr Sundareshan indicated that the delay on part of Cairn in seeking formal approval will lead to slippage in the oil ministry's previously stated year end deadline for making up its mind on giving approval for the deal. A decision on the deal may now come as late as in February 2011.

The law ministry in an opinion sent late last month had held that the share sale is nothing but transfer of control (in all of the 10 properties of Cairn India), necessitating government nod in all of them.

Previously, the Solicitor General had held the same view when he was approached for advice by ONGC.

Cairn India is primarily an aggregation of interests that it holds directly or indirectly through its subsidiaries in 11 blocks (in India and Sri Lanka). A transfer of controlling stake in Cairn India amounts to a transfer of the respective participating interests, therefore necessitating government approval, according to legal opinion.

And transfer/sale/assignment of interest to third party will trigger pre-emption rights of state-owned ONGC, which partners Cairn India in most of its properties.

Cairn says the Vedanta deal is only a corporate transaction involving share transfer that does not trigger issues like examination of new owners' technical capability and ONGC's pre-emption rights.

Both, the oil ministry and ONGC, which hold stake in most of Cairn India's properties have contested this view and have got legal opinion backing their claim. They feel the deal is effective transfer of control and so ONGC's pre-emption rights are triggered.

Vedanta was to get shareholder nod for the deal by 30th October but has not yet posted a notice for a shareholders meet. Its mandatory open offer for additional 20% stake in Cairn India, too, missed the October deadline as market regulator Securities and Exchange Board of India (SEBI) is yet to give its approval for the same.

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