Union Commerce and Industry Minister Anand Sharma on Thursday announced various sops and incentives for exporters who explore markets in Asia and Africa and asked the exporting community to look beyond the U.S. and European markets.
The new Foreign Trade Policy, coming in the backdrop of a 30 per cent contraction in exports in the last 10 months, seeks to identify 26 new markets for trade that would be eligible for sops. These include 16 in Latin America and 10 in Asia and Oceania.
At present, Indias $168 billion exports are highly concentrated in Europe (36 per cent), the U.S. (18 per cent) and Japan (16 per cent) and these are the worst hit by the biggest financial crisis since the 1930s.
We have taken a conscious view to expand and diversify our export markets, especially in the emerging markets of Africa, Latin America, Oceania and CIS countries, Mr. Sharma said.
The new policy has sought to give special focus to help the gems and jewellery sector, one of the worst hit, by allowing duty drawback on exports.
The handloom and handicrafts sector would be helped under the Market Development Scheme, while the government also announced the continuation of the DEPB scheme till December 2010. These export oriented units would be encouraged to look for new markets and they could be given incentives and tax sops to create a new basket of exports.
In the short-term, the relief measures include providing dollar credit to exporters that will be overseen by a high level committee, comprising Finance Secretary, Commerce Secretary and the Indian Banks Association.
To insulate the small and medium scale exporters who are unable to seek expensive legal help for foreign markets, a Directorate of Trade Remedy Measures would be set up.
Mr. Sharma said that while India had not been affected by the global meltdown as much as the western economies, the protectionist measures by several countries had aggravated the problem. The policy continued with the interest subsidy for exporters of two per cent for pre-shipment credit and income tax exemption to 100 per cent export oriented units (EOUs) till the end of next fiscal.
The Federation of Indian Export Organisations (FIEO) welcomed the new policy initiatives by the UPA regime and termed it as a positive step in the right direction.
Electronics and Computer Software Export Promotion Council Chairman Sunil Vachani welcomed the extension of the DEPB scheme up to December 2010 and tax benefits under Sec. 10 (A) and 10 (B) of Income-tax Act till March 2011.