The government on Thursday announced a Rs 900-crore package for exporters to help them tide over the slowdown in developed markets and rising input costs. RBI has already announced interest subsidy of 2% on rupee export credit for handicrafts, handlooms, carpets and small and medium exporters. Along with the interest subsidy the total relief package for exporters stands at nearly Rs 1,700 crore.
Sectors which would benefit from the government move on Thursday include engineering goods, pharmaceuticals and chemicals, apparels and others. Commerce minister Anand Sharma unveiled a special focus market scheme, which would help diversify the country's exports to new markets. Under the scheme, an additional 1% duty credit would be provided to exporters, who ship their goods to markets in Latin America, Africa and CIS countries. The total number of countries in the scheme is 43 and includes new entrants Cuba and Mexico.
"These are not easy times for the exporting community. The shroud of economic uncertainty still envelopes the global economy. The troubles which began with a sovereign debt crisis in Europe last summer continue and still linger. Actually things have become even more serious thereby sapping both business and consumer confidence in one of our largest markets - US. We have to ensure that export growth continues," Sharma said. The commerce ministry has undertaken a series of measures to open up new markets to counter the slowdown in the country's traditional markets like US and EU.
"My guess is in a ballpark range, excluding interest subvention, it will be roughly around Rs 800-900 crore. For interest subvention it will be around Rs 800-Rs 1,000 crore... roughly about Rs 1,700 crore," commerce secretary Rahul Khullar said when asked about the total outgo on the schemes.
Fifty products in engineering, pharmaceuticals and chemicals would get special bonus of additional 1% of export value between October and March in the current financial year. "It is a Diwali bonanza. We were not expecting this much," said Ramu Deora, president of the Federation of Indian Export Organisation (FIEO).
Sharma also said the government had set up a panel comprising the finance secretary, commerce secretary, and secretary financial services which would address the issues of availability of dollar credit. "I have discussed the issue with the finance minister and we will ensure continued availability of dollar credit," he said.
The commerce minister was confident of meeting the $300 billion target for exports set for 2011-12. But he said the global economic slowdown posed a tough challenge. Exports are estimated to have risen 52% to $160 billion in the first half of the current financial year on the back of robust performance from engineering goods and petroleum products.
Industry groups cheered the move saying it would help Indian exporters in the current challenging global environment. "Additional benefits in terms of Special Focus Market Scheme, Special Bonus Benefit Scheme and support to apparel sector would be vital in stepping up the competitiveness of our exports," said Rajiv Kumar, secretary general of Ficci.