Foreign trade policy to be out by next week.

Sharma during his hour long meeting with Mukherjee was understood to have discussed the contour of the forthcoming FTP and fiscal incentives which could be provided to exporters, who have hit badly due to shrinkage of demand in the U S and European Union countries following global slowdown.

Commerce Ministry officials indicated that the FTP would be unveiled on August 27. The U S and European countries are India’s major trading partners and constitute the major market for Indian merchandise.

Focus on expansion

“One of our key areas of focus (in FTP) will be on how to expand our market. In the face of ongoing demand shrinkage if there is no diversion and expansion of market, we will not be able to respond to this challenge,” Sharma said. “We can extend necessary supports to our exporters. But if the demand in the major developed countries, who import our products, does not pick up, the government cannot do much. So we have to look for newer markets,” he added.

In the follow-up to formulation of FTP the Commerce Minister during his interactions with chambers of trade and industry and export promotion bodies, has suggested for exploring new markets other than India’s traditional trading partners. On the onset of global slowdown in August last year India’s export has been consistently declining since October, 2008 at an average rate of 20 to 25 per cent.

As the contraction of demand in India’s major trading countries have adversely affected country’s most of labour-intensive sectors like textile, garments, gems and jewellery and leather products, the government is seriously contemplating to unveil series of fiscal incentives in the FTP for these segments of the export industry.  “We will ensure (in FTP) that labour-intensive sectors do get special attention,” Sharma said.