NEW DELHI: The government may marry two existing schemes that incentivise export of niche products and to niche destinations and make export of labour-intensive products more competitive in traditional markets and increase exports to new destinations.
The foreign trade policy, that will be announced next month, is likely to include sops for exporting products such as gems & jewellery, leather, textiles and marine items to specific markets that include the US, the European Union, South Africa, Brazil and CIS countries, a government official said.
“The government seeks to identify a specific product which has a potential in a specific market and give an incentive for that,” the official added.
Of the existing schemes, focus product gives sops for export of niche products and focus market for export to niche destinations. In case of duplication, the proposed scheme could subsume parts of these schemes.
The global slowdown has pushed exports from the country into negative territory since October last year. In fact, exports from labour-intensive sectors such as textiles and handicrafts, leather and gems and jewellery have witnessed the sharpest fall, leading to job losses.
Earlier, commerce and industry minister Anand Sharma had said that the government would do whatever it could to bail out the labour-intensive manufacturing sectors.
Under the focus product and focus market schemes, exporters get incentives worth 2.5% of the value of exports in the form of duty-free scrips that can be used to import goods duty-free or sold in the market.
There would be more discussions on the issue that would seek to identify specific products and markets, an official from exporters’ body Federation of Indian Export Organisations (Fieo) told ET.
For instance, there is scope for exporting gems & jewellery to Brazil, so the sector could benefit if it gets specific sops for that country, the official said.
Another difference between the proposed scheme and the existing ones is that the current schemes are only for niche markets, which is why the existing schemes did not cover countries such as South Africa and Brazil—which already exist on the radar of the Indian exporter—but some others in the region.
“The government not only wants to create new markets but also increase presence in the existing ones,” the government official added.
Source : The Economic Times