Ministries differ over Africa

After special economic zones, commerce and finance ministries have locked horns over inclusion of Africa in the focus market scheme.

The differences are so sharp that Commerce and Industry Minister Kamal Nath has sought Prime Minister Manmohan Singh's intervention.

The finance ministry is unwilling to include Africa under the scheme, which was announced with much fanfare in the foreign trade policy a month ago, pointing at revenue outgo of Rs 500 crore. The foreign trade policy was cleared by the prime minister before it was unveiled.

The commerce ministry had unveiled the schemes to promote export of select products in select regions, replacing the controversial Target Plus scheme.

At that time, focus markets covered only Latin America, but the commerce ministry felt that Africa should be included as China was emerging as a major competitor in the region, sources said.

The commerce ministry says Indian exports need a little extra push to increase their market share in the continent. In fact, market promotion initiatives by the ministry have a special focus on Latin America, Africa and the CIS countries.

Due to the differences, the focus products scheme has not been notified as it was clubbed with the focus markets scheme.

However, with the issue far from being resolved, the commerce ministry has taken steps for notification of the focus product scheme.

A focus products scheme covers value-added fish, leather products, stationery items, fireworks, sports goods, and handloom and handicraft items.

The scheme provides for duty credit facility at 2.5 per cent of the freight-on-board value of exports on 50 per cent of the export turnover.