New Delhi, June 5: The government Tuesday set a target of increasing exports by 20 percent in 2012-13 and announced a series of measures including interest subsidy and market diversification programmes to boost foreign trade.
In the annual supplement to the foreign trade policy, Commerce and Industry Minister Anand Sharma announced extension of interest subsidy scheme by one year till March 31, 2013 for labour intensive sectors.
Last year, the government had created a special dispensation for labour intensive industry by extending the facility of two percent interest subvention for handlooms, handicrafts, carpets and small and medium enterprises (SMEs).
“We have now decided to extend the scheme for another year till 31st March 2013 and expand its coverage to include other labour intensive sectors namely toys, sports goods, processed agricultural products and ready-made garments,” Sharma said.
Sharma, who also holds the textiles portfolio, said the government has decided to continue with most of the incentives announced last year to help exporters.
“It is our expectation that with these measures and with the tenacity of our exporting community, we shall be able to sustain an annual export growth of 20 percent this fiscal as well,” the minister said.
India’s exports increased by 20.94 percent to $303.71 billion in the financial year ended March 31, 2012, surpassing the government’s target of $300 billion.
However, a sharp drop in exports growth in the last few months indicate that sustaining a similar growth this financial year would be difficult.
Exports grew at a sluggish rate of 3.23 percent to $24.45 billion in April, the first month of the current financial year. In fact, exports declined in March, and registered nominal growth in the previous two months.
It will be interesting to see if the government’s efforts would help revive growth in exports.
In the annual supplement to foreign trade policy 2009-14, the government unveiled a seven-point strategy to boost exports. It proposes:
– To give a focused thrust to employment intensive industry because we view exports not only in terms of their economic contribution but as a means of generating gainful employment;
– To encourage domestic manufacturing for inputs to export industry and reduce the dependence on imports;
– To promote technological upgradation of exports to retain a competitive edge in global markets;
– To persist with a strong market diversification strategy to hedge the risks against global uncertainty;
– To encourage exports from the North Eastern Region given its special place in India’s economy;
– To provide incentives for manufacturing of green goods recognising the imperative of building capacities for environmental sustainability; and
– To endeavour to reduce transaction cost through procedural simplification and reduction of human interface.