The United States and European Union have been included in the list of export destinations for leather and certain textile items under the market-linked focus product scheme, a key duty-reimbursement tool used by exporters.
Under this scheme, exporters will get duty-free scrips of up to 2 per cent of the value of their export consignments. The scrips can then be used as cash substitutes while paying for the import of inputs used for making goods meant for overseas sales. The scheme, which will be valid for the next six months, will help leather and textile exporters garner orders for the autumn season at competitive rates.
All leather products as well as readymade garments made from cotton, silk, wool and as man-made fibres will enjoy the benefits of the scheme. These markets account for about 80 per cent of the leather and garment exports from India.
“Our textiles and leather sectors are severely affected by the economic depression in US and Europe. We have been considering how we can assist our textiles and leather industry to face the increased competition arising out of depressed demand in US and EU,” Commerce Minister Kamal Nath said here today.
The export-promotion measure, having a capital outlay of Rs 325 crore, was announced by Nath on Thursday. Today, he released the fine print of the scheme.
In addition, the commerce ministry will also request banks and financial institutions not to classify bad debts taken by coffee growers as non-performing assets (NPAs).
More From This Section
“The coffee sector is under stress. Our department has been working on a package to ease the loan burden of coffee growers. This has been sent to the Union Cabinet for approval. But it won’t be able to take a decision on this because of the elections. We will be instructing banks and lending institutions not to initiate legal processes (against coffee growers) until another Cabinet has taken a decision,” Nath added.
Nath called for more cuts in key policy rates by the Reserve Bank of India: “With inflation close to 3 per cent, RBI will and should look at more incisive methods to stimulate the economy.” It’s not only a question of cutting key interest rates and increasing liquidity, but also making money available at a viable cost, he added.