New Delhi, Aug. 24: The foreign trade policy is expected to provide sops to labour intensive segments, especially textiles, gems and jewellery, for selling products in markets that are beyond the traditional destinations of the US and the EU.
The government may also relax the service industry’s obligation to export under a scheme allowing import of machinery at lower duty.
“We are looking at market expansion as diversion and expansion are the key means to respond to the challenge of the global slowdown,” a senior commerce ministry official said. The five-year trade policy will be unveiled on August 27.
“About 60 per cent of our traditional markets are in recession. Our exporters will be looking to expand their markets to make sure they remain competitive,” he said.
The markets that have been identified for sops include Africa, Latin America and the UAE.
However, concessions would also be given to specific products linked to a market, for instance, certain textiles exports to the US and the EU, the official said.
The trade policy is also expected to help the service industry, especially the hotel and travel firms, by allowing a relaxation in obligation under the export promotion capital goods scheme that allows firms to import machinery at 3 per cent instead of 7.5 per cent duty.
Services account for 40 per cent of the country’s exports basket. It accounts for 2.7 per cent of the global services export market and has potential to increase its share.
India’s services exports registered 12.2 per cent growth at $101 billion in 2008-09, compared with a 23.3 per cent increase in the previous year.
The sops would also focus on employment-generating areas such as textiles, leather, gems and jewellery, and handicrafts.
These sectors are having a torrid time over the past nine months as their demand dried significantly in the US and the EU.
The EU accounts for 36 per cent of exports by India, the US, 16-17 per cent, and Japan 15-16 per cent.
These three main nations account for 68 per cent of exports, and any slowdown in these economies will impact Indian firms.
Source : telegraphindia.com