Exporters not enthused about trade policy.

NEW DELHI: With the government focusing on financial consolidation, exporters are not hoping for any major incentive aside from a procedural tinkering from the annual review of the foreign trade policy later this month.

"Exporters are not expecting much (in terms of )financial part of the Foreign Trade Policy (FTP), but I think government would take some steps on the non-financial part," President of the Federation of Indian Export Organisations (FIEO) A Sakthivel said.

He said some steps like reduction in the transaction costs by streamlining of procedures for clearances can be expected from the policy.

The policy, to be unveiled in the last week of this month by Commerce and Industry Minister Anand Sharma, may at best, shuffle the export incentives from one sector to another.

Despite over 30 per cent growth in exports, there are some sectors like textiles and handicrafts which still require government intervention.

With pick-up in industrial activity this fiscal, Finance Ministry is in the process of withdrawing the fiscal stimulus given to the industry in 2008-09 and 2009-10.

According to figures given by Finance Minister Pranab Mukherjee in Parliament last week, the total fiscal stimulus added to Rs 186,000 crore. The financial expansion as a result of the stimulus was partly responsible for inflation ruling in double digits.

However, the government has been withdrawing the stimulus in the current fiscal with partial rollback of the excise duty concessions from eight per cent to 10 per cent for most of the items.

Exports have grown by over 30 per cent in the first quarter of the current fiscal to around USD 50 billion.

According to the Prime Minister's Economic Advisory Council, the year may end with USD 216 billion for export shipments. However, economic woes in some of the European economies and their impact on rest of the continent remains a cause of worry.

But despite the recovery, exports are still below the 2007-08 levels and the first half of 2008-09 fiscal, trade experts said.

"Still, exporters should not expect much from the FTP. They should expect limited incentives from the Commerce Ministry due to the ministry's financial constraints," an international trade expert with the Indian Institute of Foreign Trade said.

Given the financial constraints, the Finance Ministry is not inclined to give any more incentives to exporters. At best, the Commerce Ministry would give some sops here and there in terms of increasing the number of items and the markets eligible for sops, sources said.

The Commerce Ministry reviews the five-year FTP (2009-14), annually to incorporate the current market dynamics.

Source : economictimes.indiatimes.com