The government today announced a slew of measures aimed at incentivising exports, bringing relief to exporters who continue to battle subdued demand in key western markets. Despite the newly announced sops, commerce and industry minister Anand Sharma said the annual target of $360 billion would be difficult to meet.
“I have said that we are finding it difficult... But we will make every possible effort.It is an imperative for us to give a determined push to India’s exports because both the internal economy and trade account, current account and the value of the currency all are interlinked. That is why it becomes a matter of priority and concern for us when there is a sharp contraction,” Sharma told reporters while announcing the relief measures.
Faced with a widening trade deficit, the government has extended the 2 per cent interest subvention scheme till March 2014. The scheme was to end by March 31, 2013. Apart from specific labour-intensive sectors like handicrafts, carpets, handloom, and readymade garments, the scheme has also been extended to a few sub-sectors of engineering sector, which saw a decline of 6.59 per cent during the April-November period.
Further, the government has also decided to “grant incentive on incremental exports made during the January-March 2013 period over the base period of January-March 2012,” Sharma said. The incentive would be available at the rate of 2 per cent on the incremental growth of exports made to the US, EU and Asian countries. “With these measures we should be able to give a push to our exports in the last quarter of this financial year,” the minister said. He, however, refused to give a figure for the revenue foregone for doling out these sops.
Apparel Export Promotion Council chairman A Sakthivel said the move will “surely give needed thrust to the apparel and textiles sector which was reeling under the sluggish markets of US and Europe. About 75 per cent garments exporters would get the benefits of incremental exports scheme”.
Apart from that, a pilot scheme of 2 per cent interest subvention for project exports through EXIM Bank for countries of SAARC region, Africa and Myanmar was also announced today. The scheme will be operational for a combined worth of $500 million with immediate effect.
The government also added about 60 new products under the Market Linked Focus Product Scheme and more than 100 items under the Focus product scheme.