The government has announced more sops to stem the slide in exports that has led to alarming widening of the trade deficit and depreciation of the rupee.
The incentives include extension of the 2% interest subsidy available to certain sectors by one more financial year, until the end of March 2014, and expanding coverage to a few engineering sub-sectors to make exports more competitive.
Besides, all small and medium enterprises, irrespective of sectors, will get this subsidy, an incentive that the government hopes will help push exports by the end of the current fiscal.
Commerce and industry minister Anand Sharma admitted that the target of $360 billion for exports in the current fiscal is likely to be missed.
India’s exports contracted 5.95% to $189.2 billion during April-November, contributing significantly to the high trade deficit of nearly $130 billion.
The sectors covered under the interest subsidy scheme include handicrafts, carpets, handloom, readymade garments, processed agriculture products, sports goods and toys.
The government also announced additional incentives for incremental exports to the US, European Union and Asian countries, besides adding New Zealand, Cayman Islands, Latvia, Lithuania and Bulgaria to its ‘focus market scheme’. The scheme aims to make exports more competitive in certain overseas markets by offsetting high freight costs. Sharma also announced a pilot scheme of 2% interest subsidy for project exports through Exim Bank for countries in the SAARC region, Africa and Myanmar to spur exports to new markets. These incentives are in addition to the annual supplement of the foreign trade policy announced in June.
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