Foreign trade policy to address slump in exports

Commerce Minister Anand Sharma is likely to announce measures to deal with slowdown in exports when he presents the Export-Import Policy for 2009-10 before the end of current session of Parliament.

Replying to questions in Rajya Sabha, Finance Minister Pranab Mukherjee said Indian exports have slowed down since October 2008 because of economic downturn and financial crisis in principal markets in North America and European Union.

European Union accounts for 36 per cent of the total exports by India, US 16-17 per cent and Japan 15-16 per cent. These three main markets together account for 68 per cent of the country’s exports and naturally any slowdown in these economies will impact Indian exports, he said.

There were no signs as yet of revival of economies of European Union and North America, he said.

Mukherjee said he has had discussions with Sharma on the contours of the foreign trade policy (EXIM Policy) and couple of rounds of more discussions would follow. “I am confident that by the end of current session, Commerce Minister will be able to place the EXIM Policy.” Mukherjee said a high-tech production export promotion scheme was announced in the Foreign Trade Policy 2007 but was operationalised only from February 19, 2009. “I admit there has been considerable delay,” he said.

Duty credit scrips
Mukherjee said the scheme provides for duty credit scrips against exports of 12 notified products equivalent to 1.25 per cent of fob (free-on-board) value of exports or five per cent of incremental growth.

The notified products include high-tech items like SIM cards, memory cards and automated bank note dispensing machines, as per a notification issued by the department of revenue operationalising the scheme.

“This incentive will help Indian exporters of notified high-tech products to offset costs involved in marketing of these products thus making export of their products internationally competitive,” he added.