New steps to boost exports

Policy aims for $360 billion exports in 2012-13, adds new markets

Amid tepid demand for Indian exports in traditional markets of the US and Europe, the government, on Monday, unveiled a 7-point strategy to boost shipments and added fourteen new markets to its existing list of global export destinations.

The new markets include Austria, Myanmar, the Netherlands, Ukraine, Morocco and Uruguay. Unveiling the annual supplement to the Foreign Trade Policy 2009-14, Commerce Minister Anand Sharma also announced extension of interest subsidy scheme for exporters by a year till March 31, 2013.

“We have now decided to extend the scheme (interest subvention) for another year till March 31, 2013 and expand its coverage to include other labour-intensive sectors namely toys, sports goods, processed agricultural products and ready-made garments,” Sharma said.

“The underlying philosophy of this year’s supplement is based on seven broad principles,” he said, adding that these would include added thrust on employment-intensive industry and the continuation of market diversification strategy.

The minister also exuded confidence that India would be able to sustain a 20 per cent export growth to $360 billion in the current fiscal. India’s exports grew 21 per cent in 2011-12 to touch $303 billion.

Under the proposed interest subvention scheme, a 2 per cent interest subsidy will be given to handlooms, handicrafts, carpets and the small-scale sector. Sharma also said that new guidelines to revamp Special Economic Zones (SEZ) and Export Oriented Unit (EOU) schemes were in the pipeline to give a push to exports.

“These measures will infuse necessary confidence in the exporting community and provide required dynamism even during this gloomy time,” Sharma said.

In order to reduce transaction costs, the Foreign Trade Policy (FTP) also introduced a new post-export Export Promotion Credit Guarantee (EPCG) scheme, which will provide flexibility to exporters for importing capital goods.

Under this, exporters will be entitled to obtain duty-free scrip in proportion to the actual exports. Sharma said that the decision has been taken to promote domestic manufacturing and value-addition and employment, which will be a significant measure of import substitution.

Analysts said that the inclusion of Myanmar in the list of new overseas markets is likely to benefit shipments from four north-eastern states namely, Mizoram, Manipur, Nagaland and Arunachal Pradesh, with whom Myanmar shares a common border. India Inc and exporters hailed the FTP saying it would help sustain the export growth momentum amid global uncertainties.

“We welcome the FTP announcements. The policy will help exports a lot during the time when there are economic problems in the US and European markets,” FICCI President R V Kanoria said.

The Federation of Indian Export Organisations (FIEO) President Rafeeq Ahmed said that the measures would have a lasting and positive impact on the country’s trade.