The Government is likely to broaden the scope of incentives to help exporters, who are facing the impact of a weak rupee and slowdown in Western markets. The sops may include interest subvention and market development assistance.
The Commerce Minister, Mr Anand Sharma, on Thursday took stock of the sector and held discussions with stakeholders, including various export promotion councils, ahead of the foreign trade policy (FTP) to be announced on June 5.
“The Government will do everything feasible, given the pressure on resources to keep India's export momentum going,” said Mr Sharma. Factors affecting exports, such as the Euro crisis, rupee depreciation and cost of credit will be discussed with the Finance Minister, Mr Pranab Mukherjee, before announcing the FTP.
“There are concerns. We have to take a balanced view. We cannot have a situation where we end up paying a higher import bill and our exports do not grow…There is a need to focus on labour-intensive sectors where the concerns have a clear social dimension,” Mr Sharma said.
Exporters have sought the continuation of existing schemes and want sector-specific assistance to fight the slowing demand in key markets, especially Europe and the US.
The Apparel Export Promotion Council (AEPC) has sought an interest subvention of two per cent for garments and knitwear. “We have also suggested creation of a Rs 500-crore market development fund to help expand our presence in traditional and non-traditional markets,” said Mr A. Sakthivel, Chairman, AEPC. He claimed that the weakening rupee had not benefited exporters, as buyers, aware of the volatile currency, had been pressuring for more discounts.
Similarly, the Gems and Jewellery Export Promotion Council has demanded that the sector be included in the interest subvention scheme.
“We have also sought a market development assistance of up to Rs 250 crore to tap new markets in China (excluding Hong Kong) and Europe (exclusive of Belgium),” said Mr Rajiv Jain, Chairman, GJEPC.
Gems and jewellery exports shrunk by 26 per cent in April 2012 to $2.6 billion, while garment exports were down 10 per cent at $1 billion over corresponding last period.