With India's exports declining for the eighth month in a row in May and the need to arrest the decline assuming urgency, the government may convert the US and Europe into focused markets, a top official said.
"We have been trying to help exporters diversify their markets in the last few months. There is a need to arrest decline in exports...We may have to convert the US and Europe into our Focus Market Scheme," Director General of Foreign Trade R S Gujral told exporters in an open-house meet organised by the Federation of Indian Export Organisations (FIEO) here today.
Introduced in April 2006, the Focus Market Scheme (FMS) aims to offset high freight cost to certain select international countries with a view to make India more competitive in those markets.
It allows duty credit of 2.5 per cent of FOB (free-on- board) value of exports to countries that are identified as Focus Markets by the government.
Contracting for the eight month in a row, India's exports declined by 29.2 per cent in May over the same month last year as overseas shipments took a hit due to the economic slowdown in major markets like the US and Europe.
Exports dropped to $11.01-billion in May from $15.55-billion in the same month last year.
Eight Latin American nations such as Argentina, Chile, Bolivia, Ecuador, Paraguay, Peru, Uruguay and Venezuela have been notified by the Government.
In Africa, 49 countries qualify for benefits under the scheme.
Assuring all help to the beleagured exporters, Gujral said that a turnaround in exports could take up to another 5-6-months.
On the textile sector which has been badly impacted by the global economic downturn, Gujral said there was a need for cost-cutting in the wake of increasing competition from Bangladesh and Vietnam.
"If we are not competitive against Bangladesh and Vietnam, then there is no use sustaining (trade) on Government sops," Gujral said.
DGFT is expected to release its new Free Trade Policy (FTP) in August for 2009-14 and solicited policy inputs from exporters.
Accordingly, exporters requested that petroleum products should be included under the Market Linked Focus Scheme to boost exports.
