NEW DELHI: India’s new trade minister on Wednesday held out hopes of incentives for exporters, as data showed no respite from the pain gripping the sector with exports dropping 30% in May, the eight straight month of decline.
Commerce and industry minister Anand Sharma said there would be measures in July’s budget and in the foreign trade policy, to be announced in August, to help alleviate some of the pain being felt the sector, the worst victim in India of the global recession.
Quick estimates put out by the commerce ministry showed that May exports fell to $10.8 billion from $15.5 billion in the year-earlier period, as demand continued to shrink in key western markets. Exports fell 33% in April, government data released earlier this week showed. Mr Sharma said the fact that exports grew at more than 30% in the first six months of the last fiscal year meant that the year-on-year decline in exports would continue until the end of August or the beginning of September.
The government also continues to stick to its export target of $200 billion for 2009-10, with the minister saying that while India was sure of maintaining exports at the 2008-09 level of $167 billion, it would work hard to achieve $200 billion this year.
“The export target of $200 billion still remains,” he said. Meanwhile, Mr Sharma said his ministry would discuss support packages with the finance ministry.
“There are some labour intensive sectors such as textiles, handloom and leather, which have suffered more than others and need special support....There will be sector-specific packages as well as policy measures to give stimulus to industry,” Mr Sharma told a news conference after a two-hour meeting with various exporters’ organisations. He also met Prime Minister Manmohan Singh on Wednesday to apprise him of the difficulties being faced by exporters and the industry.
While the minister refused to elaborate on the booster measures planned, he said that the new package would go beyond what has already been announced for exporters like the interest subvention scheme.
The government is also looking at ways to incentivise exporters to explore new markets in Latin America, Africa, Central and Eastern Europe, which have not been as affected by the global slowdown as the traditional markets in the US, the EU and Japan. Mr Sharma said the new measures being planned for the industry would bring prices down and make it more competitive globally.
In 2008-09, India’s exports were just 3.4% higher at $ 168.7 billion compared to $163 billion in 2007-08. While exports registered a 34% growth in the first six months of 2008-09, the downturn hit exports in the second half of the fiscal bringing down the growth rate to below 4%.
Source : The Economic Times