In a move that would be certainly be welcomed by the country's exporters and importers, the government has decided to extend the interest subvention plan on certain sectors while extending the Duty Entitlement Pass Book (DEPB) policy by another six months.
On Monday, the Commerce and Industry Minister Anand Sharma, while reviewing the foreign trade policy 2009-14, announced that the interest subvention plan of two per cent for leather, jute and textile has been extended. The minister also said that bonus schemes for handicrafts and leather would also be introduced.
The DEPB scheme is an export incentive given by the way of grant of duty credit against the export product to promote diversification in exports.
The minister had earlier said that the government would not hesitate in assisting sectors that employed huge amount of people if they failed to achieve growth. Some of those sectors were handicrafts, textiles, leather, engineering goods, rice and carpets.
The other salient features of the review, include extension of zero duty Export Promotion Capital Goods (EPCG) scheme by one year.
The minister, however, noted that the recovery in exports so far has been fragile and that they are still facing challenge in the global markets.
Exports during the first four months of the financial year through July rose 30.1 per cent to $68.6 billion, whereas imports grew 33.3 per cent to $112.2 billion, resulting in a cumulative trade deficit of $43.6 billion. According to Commerce Secretary Rahul Khullar, it is not time to celebrate yet, as exports have not reached the pre-crisis level, when the average growth hovered between 18 per cent and 25 per cent.
In 2009-10, the estimated revenue loss on account of various export promotion schemes, including FMS, FPS, DEPB Scheme and SEZ, among others, was Rs 43,622 crore, compared to Rs 49,053 crore (provisional) in 2008-09.
India’s merchandise exports for the entire financial year 2009-10 fell 4.7 per cent to $176.5 billion, compared to $185.3 billion in 2008-09. The government has set a target of $200-billion exports for 2010-2011.
