Govt. announces sops for exporters, says will meet $ 200 b export target

Union Minister of Commerce & Industry Anand Sharma releasing the Foreign Trade Policy, in New Delhi on August 23, 2010. Minister of State for Commerce & Industry Jyotiraditya M. Scindia, and the Commerce Secretary, Rahul Khullar are also seen.

The Government today announced sops worth Rs 1052 crores for exporters, especially in the textile, handicrafts and leather sectors and said it was confident of achieving the export target of $ 200 billion for 2010-11.

"We had set a target for merchandise exports for 2010-11 at $ 200 billion. Our total merchandise export for 2009-10 was $ 178.66 billion. With the present growth trend, we are

on course to achieve export target for 2010-11," Union Commerce and Industry Minister Anand Sharma said while unveiling the Annual Supplement 2010-11 to the Foreign Trade Policy (FTP) 2009-14 here.

He said that, in the remaining three years of the Foreign Trade Policy, the country should be able to return to the high export growth path of around 25 per cent per annum.

"By 2014, we expect to double India’s export of goods and services. It shall be our endeavour that industry and government work in tandem, and by working closely, we hope to achieve this

target as well," he declared.

Among the measures announced today is the extension by six months of the Duty Entitlement Passbook (DEPB) scheme beyond December 31, 2010 to June 30, 2011.

"DEPB has been one of the most popular and exporter-friendly scheme for more than a decade. Despite the fact that this scheme has clearly been identified for early sunset, we

extended it till 31.12.2010 in view of the difficult international economic situation and the contraction of demand in developed economies. Recognizing the fragile recovery and the prevailing uncertainties, I have been able to obtain extension of DEPB one last time for a further period of 6 months - till 30.6.2011," Mr Sharma said.

The other steps include an additional benefit of 2% bonus, over and above the existing benefits of 5% / 2% under Focus Product Scheme (FPS), allowed for about 135 existing products, which have suffered due to recession in exports.

The major sectors that will benefit include all handicrafts items, silk carpets, toys and sports goods (all of which were earlier eligible for 5% benefits); leather products and leather footwear, handloom products and engineering items including bicycle parts and grinding media balls (all of which were earlier eligible for 2% benefit).

As many as 256 new products have been added under FPS, which shall be entitled for benefits at the rate of 2% of FOB value of exports to all markets. The sectors and product groups that will benefit from this include engineering, electronics, rubber and rubber products, finished leather, packaged coconut water and coconut shell worked items.

Further, nearly 300 products from the readymade garment sector have been incentivised under MLFPS for further six months from October 2010 to March 2011 for exports to 27 European Union countries.

The zero duty Export Promotion Capital Goods (EPCG) scheme, due to expire on March 31, 2011, has been extended by one more year till March 31, 2012.

In addition, to give a boost to technological upgradation for additional sectors as well, the benefit of the scheme has been expanded to cover paper & paperboard and articles thereof, ceramic products, refractories, glass & glassware, rubber & articles thereof, plywood and allied products, marine products, sports goods and toys and additional engineering products.

Barmer in Rajasthan, Bhiwandi in Mahahrashtra and Agra in Uttar Pradesh have been added to the list of Towns of Excellence (TEEs) for handicrafts, textiles and leather products, respectively.

The 1% Status Holder Incentive Scheme (SHIS) introduced in August 2009 and valid for only two years upto 31.3.2011, has been extended by one more year for 2011-12 exports to support them to upgrade their technology.

Mr Sharma said the immediate objective of the FTP 09-14 announced last year had been to arrest and reverse the declining trend of exports against the background of the global economic crisis.

"We can look back with a sense of satisfaction and now claim with humility that the immediate objectives of the policy were realized. The decline in exports was arrested. And, the trend

was reversed. Clearly, our steps were in the right direction," he said.

He said exports, which were steadily declining since October 2008 turned the corner in October 2009. Exports posted an average positive growth of 19.6%, between October

2009 and March, 2010. In the first quarter of 2010-11, exports have grown by 32% compared to last year.

He, however, pointed out that the recovery so far had been fragile and the economies around the world were still emerging out of the shadows of a grim recessionary period.

"The uncertainty surrounding exporters’ prospects, therefore, continues to linger. We are not yet out of the woods," he said.

He said a new facility of Annual EPCG authorization for the exporters was being introduced with a view to reduce the transaction cost and time for exporters, as they will not need to obtain multiple EPCG authorizations in a year.

NNN