In a bid to generate employment, the government is framing a scheme to allow duty-free import of capital goods by the domestic industry, reported The Hindu BusinessLine quoting sources.

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The initiative can be an alternative to some of the export incentive schemes which are likely to be phased out or withdrawn because of their incompatibility with global trade rules, the report said.

A team led by the Directorate-General of Foreign Trade (DGFT) and including trade experts and industry representatives is framing the scheme, which will finally be included in a Cabinet note on alternative incentive schemes for the domestic industry and exporters, the daily said.

However, there are a couple of glitches in the execution of the scheme, the report said, adding that a scheme to incentivise capital goods import could go against the interests of the domestic capital goods industry.