Struggling exporters to share Rs 1,052 crore in incentives

Struggling exporters will divide Rs 1,052 crore in sops while they wait for demand from the developed world to gather steam following last years recession....

Struggling exporters will divide Rs 1,052 crore in sops while they wait for demand from the developed world to gather steam following last years recession. Despite a Rs 300 crore cut in the subsidy allowance from North Block,Commerce and Industry Minister Anand Sharma described the world recovery as fragile and uneven,forcing the government to provide a crutch for sectors like textiles,leather and capital goods while unveiling the annual supplement to Indias Foreign Trade Policy (FTP) 2009-14.

Whatever recovery has been there is stimulus-fed and stimulus-led, Sharma said,adding that it was posing challenges to Indian exporters. The minister emphasised that domestic traders,particularly exporters,had been resilient in their fight against economic struggles; that although the trade figures have been on a year-on-year rise for 10 months,this growth has largely depended on financial rejuvenation from the government.

A bonus-incentive scheme is being introduced for those sectors whose exports are not doing well. This specially covers labour-intensive sectors like handicrafts,hand-looms,leather and leather manufacturers,carpets,sports goods,toys and some bicycle parts.

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The Finance Ministry has signed off on Rs 1,052 crore in subsidy for exporters. Earlier this year,Sharma had written to Finance Minister Pranab Mukherjee seeking a repeat Rs 1,350 crore for a second year.

Commenting on the measures,CII Director General Chandrajeet Banerjee said,The special focus on labour-intensive sectors is most welcome. The focus on reducing transactions is very critical and,therefore,a laudable step.

I hope that with all these incentives,we should be able to achieve the (export) target of $200 billion, said Ficci President Rajan Bharti Mittal.

Despite receiving a smaller budget,Sharma aimed to provide some relief to exporters hurt by the global slowdown,He announced an extension of the DEPB (Duty Entitlement Pass Book) scheme till June 30,2011. The scheme allows exporters to recover duties from the government for some imported inputs.

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We are happy that the sectors which were not doing well have been considered. The DEPB and interest subvention are welcome, said Federation of Indian Export Organisations (FIEO) President A Sakthivel.

However,the extension of DEPB up to June 30 is for the last time while the interest subvention of 2 per cent has been extended to the textiles,jute,leather and engineering goods sectors,Sharma said.

Sharma also announced an extension of the zero duty EPCG (Export Promotion for Capital Goods) for one more year,that is till March 31,2011,and SHI (Status Holders Incentive) scheme for one more year through March. Traders have been temporarily satisfied with the extended government aid but insist that the sops will fail as long-term remedies,and that the ministry must push for resolution of the Doha Round to reduce trade barriers.

The Doha Round must be resolved to bring India to the same level as those countries benefiting from special exemptions since 2005, said Indorama Industries Chairman S P Lohia.