In a first for India, Gujarat plans 5-yr export policy.

NEW DELHI: Gujarat, which accounts for about a quarter of India's total exports, is mulling a five-year export policy to focus on value-added exports in sectors such as textiles, agriculture and dairy.

The move by the top exporting state in the country comes on the back of sagging efforts by the centre to boost dwindling exports.

The first state in the country to have an export policy, Gujarat plans to increase the share of exports from the state from 25% to 30% in five years.

As a precursor to the policy, the Federation of Indian Exports Organization undertook a study for Gujarat on the state's export competitiveness and identified sectors with export potential.

"We are working on improving exports from the state and will take steps to increase the share to 35% of total India's exports by 2020," said a state government official.

The government may announce incentives ranging from exemption from value-added tax (VAT) in some sectors to focus market scheme and focus product scheme to offset high freight cost and other externalities to select international markets and promote products with high-export intensity.

India's overall exports declined by 1.76% in 2012-13 to $300.6 billion, as demand in the US and the EU subsided on slowing economy. Following this the centre announced a series of incentives in the annual supplement of the foreign trade policy. "Centre's policies cannot be so specific, whereas the state policies are made as per the needs of the state. So you need such simultaneous policies," said Manoj Pant, professor, JNU.

Given that over 90% of Gujarat cotton goes to other states for value addition, emphasis would be laid on readymade garments. The state already has potential in the textile sector, as nearly 23% of the state gross domestic product comes from textile and related industries. Other areas that Gujarat contributed to India's exports in 2011-12 include 70% in the gems and jewellery sector, 30% in pharmaceuticals, 20% in textiles, 12% in engineering and 18% in chemicals.

"Gujarat should strive to increase its exports by shifting its focus from lower-end markets to value-for-money markets," said Ajay Sahai, director general and CEO, FIEO.

As of now, it has been supplying domestic and international markets with raw materials but with proper R&D and focused investments, Gujarat should introduce high value-added products of global standards. Only a quarter of export units have an export house or upward status for special benefits, the FIEO study noted.

The state has 41 minor and intermediate ports and 55 SEZs, involved in sectors like biotechnology, power, handicraft, gems & jewellery. Gujarat also has a comparative advantage in many commodities, like spices and seeds, mineral and metals and cotton.

Source : economictimes.indiatimes.com