Worried by dwindling exports and the rising trade account deficit, the Government on Wednesday announced a number of measures to boost exports. This is the second round of incentives in less than six months.
The sops include extension of 2 per cent interest subsidy for another year till March 2014, and additional incentives on incremental exports.
“We are finding it difficult to meet export targets and want to stop and reverse the fall in exports. Year 2012 has been particularly difficult and the Government will continue to monitor the situation. We will make every possible effort to improve exports. It is matter of priority and concern,” Commerce and Industry Minister Anand Sharma told reporters.
The Government had set an export target of $360 billion for 2012-13.
During April-November this year, exports contracted 5.95 per cent to $189.2 billion due to the slowdown in major markets such as the US and Euro Zone. Imports stood at $318.7 billion compared with $324 billion in the last financial year. The trade deficit for the period stood at $129.5 billion compared with $122.6 billion in the same period a year ago.
Sharma said the Government would extend the period of interest subvention on certain specific sectors including handicrafts, carpets, handloom sports goods and toys, among others.
“All these sectors are directly linked to job-creation. Also, our efforts for market diversification to Africa, ASEAN and South Amercia have paid dividends,” he said, adding that trade stands at $65 billion.
Additionally, the engineering sector, which has been a laggard in exports since the global downturn, has been extended sops.
“To retain this competitive edge and to boost engineering exports, certain specific sub-sectors of the engineering sector would be extended the benefit of 2 per cent interest subvention. They will receive this benefit from the last quarter of the current financial year, that is, from January 1, 2013 till March 31, 2014,” Sharma added.
Wednesday’s incentives came in the backdrop of the Annual Supplement to the Foreign Trade Policy announced on June 5. A pilot scheme of 2 per cent interest subvention for project exports through Exim Bank for countries of the SAARC region, Africa and Myanmar has also been announced. Sharma said the objective of the scheme was to boost India’s exports in these countries by providing long-term concessional credit through Exim Bank.
He said five new countries — New Zealand, Cayman Islands, Latvia, Lithuania and Bulgaria — had been added under the Focus Market Scheme, while Eritrea was added under the Special Focus Market Scheme.