Exporters get rs 900-cr lift

The government on Thursday bolstered the special incentive package for exporters facing tough times in the US and EU markets with two new duty credit schemes. To promote market diversification, exports to 41 countries would be given 4% duty credit — as opposed to 3% now— under a new Special Focus Market Scheme. Another scheme covering 50 products in the areas of engineering, pharmaceuticals and chemicals would provide the exporters of these products an additional 1% duty credit.

The revenue foregone on account of these and other concessions announced on Thursday would be some R900 crore. With the 2% interest subvention for exporters’ rupee credit announced by the Reserve Bank of India on Tuesday, the total cost of the package for exporters could be around R1,700 crore, commerce secretary Rahul Khullar said.

“We are introducing a special focus market scheme. It will cover 41 countries — 12 from Latin America, 22 from Africa and seven from CIS countries,” commerce minister Anand Sharma said, announcing the annual review to the Foreign Trade Policy 2009-14. The scheme is applicable from October to March this fiscal.

India’s exports grew an impressive 52.1% to $160 billion in the first six months of the current fiscal, but signs of deceleration was evident in the last two months. Exports grew 36.3% in September, significantly slowing from a heady 82% in July.

“Times are still challenging. There is a very limp recovery in the US and virtually no recovery in Europe ... These two countries are having their own myriad problems at present. We have to ensure that markets in which we are engaged, the year-on-year growth should continue,” Sharma said.

The market-linked focus product scheme has been extended to the US and the EU as well.

FIEO president Ramu Deroa called the sops as early diwali gift for the exporter community and said that the incentives will help the trade grow.

Among the other incentives, the apparel sector has been given duty credit under Market Linked Focus Product Scheme (MLFPS) for export to the US and Europe. The 2% duty credit would be available to exports made during 2011-12. It has been decided to extend Market Linked Focus Product Scheme benefit for exports of agricultural tractors (over 1800 cc capacity) to Turkey.

The list of items under Focus Product Scheme has also been expanded to include 130 additional items mainly in the sectors of chemical, pharmaceutical, textiles, handicraft, engineering and electronics sector.