To review foreign trade policy 2009-14 today.
The government is set to announce yet another round of stimulus measures for the country’s exporters and importers in the review of the Foreign Trade Policy (FTP) 2009-2014 tomorrow, even as economies globally are looking at phased exit from bailout packages.
While the new FTP was announced for a period of two years in August last year, the government felt it was necessary to do “minor tweaking” of the policy to sustain growth in exports, which was rising since November 2009, after plummeting for 13 straight month from October 2008, when the global economic slowdown hit the demand for ‘Made in India’ goods in the traditional markets of US, EU and Japan.
Commerce and Industry Minister Anand Sharma had earlier said 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.
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.
Some of the measures expected to be announced tomorrow are addition of more markets such as Russia, Ukraine, Turkey, Nigeria and Vietnam under the Focus Market Scheme (FMS), while giving a thrust to product diversification through the Focus Product Scheme (FPS).
Besides, measures like extension of zero-duty under the Export Promotion Capital Goods (EPCG) scheme beyond March 2011 for some more sectors to boost technological modernisation and upgrade could also be announced, according to officials in the commerce and industry ministry.
Review of the FTP may also seek to extend the Duty Entitlement Passbook, or DEPB, Scheme — an export incentive given by the way of grant of duty credit against the export product to promote diversification in exports — beyond December 31 for a period of six months.
The government is also expected to unveil some far-reaching measures for the exporting community by reducing the transaction cost of exporters. This is being looked into by Minister of State for Commerce and Industry Jyotiraditya Scindia.
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.
