Exporters get Rs 900 crore Diwali gift

To boost Indias shipments to new mart

Sectors like engineering, pharmaceuticals and chemicals will benefit from the special one time support for next six months announced by Union Commerce & Industry Minister Anand Sharma, who released the annual supplement of Foreign trade Policy 2009-14.

The measures are expected to boost India’s shipments to new and emerging markets at a time when the traditional trade destinations like the US and European union are facing rough weather.

The Commerce Ministry has announced these incentives in a difficult global environment, although merchandise exports have grown 52.1 per cent in the first half of this fiscal.

Commerce Secretary Rahul Kullar said, “In a ballpark range, excluding interest subvention, it will be around Rs 800-900 crore. For interest subvention it will be around Rs 800-Rs 1,000 crore...a total of about Rs 1,700 crore.”

“Times are still challenging. There is a very limp recovery in the US and virtually no recovery in Europe...these two countries are having their own myriad problems at present. We have to ensure that markets in which we are engaged, the year-on-year growth should continue,”Sharma said.

The move will also help the country realize its export target of $300 billion in 2011-12. India’s exports witnessed a record growth last fiscal year surpassing the target by 25 per cent to stand at $246 billion.

The better than expected growth in last fiscal was achieved due to government’s efforts to tap markets in Latin America, Africa and CIS (Commonwealth of Independent states) in the aftermath of the global economic slowdown in 2008.

“Our efforts have paid us and now also exporters doing business in these destinations will be rewarded,” the commerce minister said. The reward comes in the form of a one per cent export duty credit in addition to 3 per cent already given to exporters shipping goods in these destinations.

The additional bonanza to exporters comes two days ahead of the Reserve Bank of India notifying a 2 per cent interest subsidy to export oriented units in small scale employment oriented sectors.

Reacting to the announcements made by the Commerce Minister, the Federation of India’s Export Organisations’ chairman Ramu S Deora said there could not be a better Deewali bonanza that this to the traders. He said, the move will help touch the trade target of $300 billion this financial year. Deora also urged the minister to look into the visa problem faced by the exporters. Government is aiming to double India’s exports to $500 billion by 2014.

Welcoming the export incentives, industry body Ficci said “The measures would help Indian exporters in the current challenging global environment. It would be vital in stepping up the competitiveness of our exports.”