Faced with tough market conditions in the US and Europe, carpet and handicraft exporters have approached the government for new sops to help them explore new markets.
Officials of the export promotion councils of the two sectors met Textiles Minister Dayanidhi Maran with a list of demands, including an increase in incentives under the 'Special Focus Product Scheme (SFPC)'.
They wanted Maran to persuade Commerce and Industry Minister Anand Sharma to announce fresh measures in the forthcoming annual foreign trade policy review, likely on August 23.
"We want that the incentive available under special focus product scheme to be raised by three per cent in the carpet sector to reduce the transaction cost," Carpet Export Promotion Council (CEPC) Chairman O P Garg said.
Under the SFPS of the Commerce Ministry, exporters are given duty credit scrips equivalent to 5 cent of the export value.
These scrips can be used for payment of customs duty for different types of imports by exporters. Alternatively, they can be sold to other exporters, as they are transferable.
The two labour-intensive industries employ about 3.5 million people, including craftsmen.
"It is hoped that our recommendation would be taken up favourably in the next Foreign Trade Policy review," the Export Promotion Council for Handicrafts said.
During the 2009-10 fiscal, India's carpet exports were valued at $525 million, while handicrafts shipments earned $1.83 billion.
Though these industries do not contribute significantly in terms of value to the country's overall exports of $182 billion, they are highly-employment oriented.
Of India's total handicrafts exports, 65 per cent go to the US and Europe, according to the trade figures. Carpet exporters are dependent on these markets for 70 per cent of their output.
With the problem of unemployment in the US, the demand for these products has not revived to the level of 2007-08 and 2008-09 and the exporters are facing tough market conditions.
The export promotion councils are advising their members to diversify their business to target new markets in Latin America, the Middle East and south Africa.