Policy to set export target at $200 billion.

New Delhi, April 19: The government is likely to set an export target of $200 billion for this fiscal in its foreign trade policy.

Exports in 2009-10 are estimated at around $160 billion, and the commerce ministry will provide incentives to sell new products and explore new markets in Africa, Latin America and South East Asia to reach the $200-million mark. The policy, due within two months, will set a growth target of 15 per cent over the next two years, with an overall medium-term objective of 25 per cent annual growth thereafter, officials said.

It will contain a mix of fiscal incentives as well as simplification of procedures.

“We are looking at market expansion and product diversification as they are the key for the growth of exports, which have turned positive with initiatives to deal with the challenges of a global slowdown,” a senior commerce ministry official said.

“About 60 per cent of our traditional exports markets were in recession. With government assistance they have become competitive,” he said.

The officials said, “The trade policy will provide relief to the labour-intensive exports and other sectors, which continue to feel the effects of a slowdown.” Sectors such as engineering goods, textiles, jute, carpets, handicrafts and leather continued to disappoint.

The foreign trade policy broadly spells out the priority segments and gives incentives and withdraws reliefs, depending on the country’s needs.

Extension of the duty entitlement passbook (DEPB) scheme, under which duty credit is provided to exporters, along with measures to reduce transaction costs and soften the blow of the rupee’s appreciation in labour intensive sectors are being considered.

A. Sakthivel, president of the Federation of Indian Export Organisations, said exporters wanted bank credit at a uniform rate of 7 per cent and an extension of the zero duty export promotion capital goods scheme (allowing duty-free import of capital goods) for all sectors.

On the possible extension of DEPB, sources said the scheme would be extended only till the introduction of the goods and services tax (GST), which is likely on April 1, 2011.

DEPB, which neutralises the incidence of duties, is set to expire on December 31, 2010.

GST seeks to amalgamate all state-level taxes into a single levy, thereby eliminating their cascading effect.

Measures to reduce the transaction cost like replacing the requirement of filing separate invoices — for customs, excise and value-added taxes — with a single invoice could be incorporated in the policy, officials said.

After a 13-month rout since October 2008, exporters managed to return to growth from November 2009 as the world economy is recovering from the worst recession in the last six decades. India’s exports for fiscal ending March 31 are expected to drop to $160-165 billion from $185 billion in 2008-09.

Source : The Telegraph