New Delhi, June 15 (KNN) All Foreign Direct Investments (FDIs) relating to technology transfer in niche technology should be given approval online within a period of 30 days, said exporters’ body, Federation of Indian Export Organizations (FIEO).

Raising number of issues before Finance Minister Nirmala Sitharaman in pre-budget meeting FIEO suggested “Instead of merging few small units into large-one, one can explore the possibility of value chain production wherein some of the units make parts and components, some make the final product and some make accessories for the same product. Such manufacturing should be preferred in a close geographical area so that the supply chain is integrated with minimal logistics cost.”

Suggesting another alternative for this, FIEO said “Other alternative could be to make or upgrade clusters so as to provide common facilities like tool rooms, testing facility, certification facility all under one roof for units producing same or similar goods so that the operational costs are minimized.

The corporate tax was announced to be reduced to 25% in 2015. The same has already been reduced to 25% for businesses having turnover upto Rs.250 crore.

The corporate tax reduction may be extended to all entities particularly as it will attract FDI also more so in view of the fact that US has reduced corporate tax from 35% to 21% in 2018(Combined rate from 38.9 to 25.7%), it added.

FIEO said that the GST rate may be lowered to 18% if not to 12%. Government should also consider providing exemption from GST on mode 2 of services which is treated as exports in the Foreign Trade Policy but not under taxation Policy.

To be operationalized under GST to provide refund of GST at the airport as envisaged under IGST Act. It will give fillip to tourism besides helping exports of handicrafts, non-precious jewellery, carpets, ayush and herbal products, beauty products etc, FIEO added.

Tariff reduction would also take away some sheen out of the strategy through which we allure our tariff partner to provide us more market access. This also hits at FDI inflows as with reduced tariff companies may not be eager to set their base in India and continue to supply the products from overseas manufacturing facility taking advantage of low or moderate duty, it added.