Foreign Trade Policy will aim to boost exports, Says Anand Sharma

Commerce and Industry minister Anand Sharma on Monday said that the Foreign Trade Policy will aim to boost exports by bringing down transaction costs improving access to credit and lowering the cost to credit.

"We are looking to have FTP after all the consultations are complete it will take at least one month because India is a big country and we don't want to rush it," Sharma said after his meeting with the Confederation of Indian Industry (CII) delegation on the export sector. The policy is likely to be rolled out in second half of next month.
 P Chidambaram on Monday also flagged the need to boost export, pitching is as the only long term solution to India's current account deficit that has touched an all time high.

He promised all the help to commerce ministry in the upcoming foreign trade policy. He has already budgeted a 20% increase in the budget allocation on interest subsidy for export promotion and has raised hopes of an equally higher outgo for other schemes and incentives.

FTP is expected to see an extension of the export sops announced in December to more sectors. Finance minister has assured us of support and details will be formulated shortly, Sharma added.The interest subsidies for export promotion in 2013-14 has been pegged at 1200 crore for the fiscal against 1000 crore last fiscal.

"I think given the 20% increase in the budgetary allocation on interest subvention, I am hopeful of a 25-30% increase in allocation for other schemes to be announced in the FTP," said Ajay Sahai, director general and CEO of Federation of Indian Exports Organization. The 2% interest subvention scheme may be extended to other sectors from gems and jewellery, leather, textiles and some more engineering sub sectors.

Last December, Sharma announced extension of the 2% interest subsidy available to certain sectors till the end of March 2014, expanding coverage to a few engineering sub-sectors to make exports more competitive.

Export of engineering goods declined 4% in the first 10 months of the fiscal, gems and jewellery exports were down by 9.6% and textiles and readymade garments exports were down by 7.9% during the period compared to last year. Sanjay Budhia, chairman, CII National Committee on Exports said that incentives of the focus market scheme and focus product scheme should be extended to SEZs.

"It is time to make the SEZs more competitive, else and also the Minimum Alternate Tax should be removed, as it defeats the entire purpose of an SEZ".

FIEO has also suggested an export marketing fund to help exporters compete in the foreign markets.After eight months of contraction, exports turned positive in January rising 0.82% from a year ago.

However, with a 4.9% dip in exports in April-January as against corresponding period last year, the exports are unlikely to touch $303 billion of last year, forget the $360 billion target set for the fiscal.

Sharma said, "2012 has been a difficult year, January we were marginally in the positive territory for the first time in eight months. Hopefully we should remain in the positive zone when the February final numbers come out and also in March but, we will not be meeting that big target but let's see how much close we can get to 300 billion".

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