The Commerce Minister of India, Mr Anand Sharma announced the new foreign trade policy. The new policy aims to revitalise the export sector of the country which has been seriously affected by the recessionary trends and accompanying slowdown in global markets, particularly the key markets of US, EU and Japan.
A special thrust has been reserved for labour intensive sectors like textiles, leather and handicrafts in the new policy, in the process reassures the exporters and provides them adequate confidence to maintain their market presence even in a period of stress.
A committee has been constituted with Finance Secretary, Commerce Secretary and Chairman IBA to ensure that dollar credit needs of exporters are met in a timely manner and the committee would meet periodically for this purpose.
Technological up-gradation of exports is sought to be achieved by promoting imports of capital goods for certain sectors under EPCG at zero percent duty. Under the present Foreign Trade Policy, the government recognizes exporters based on their export performance and they are called ‘status holders’.
For technological up-gradation of the export sector, these status holders will be permitted to import capital goods duty free (through additional Duty Credit Scrips equivalent to 1% of their FOB value of export in the previous year, of specified product groups). This will help them to upgrade their technology and reduce cost of production. These two schemes would be valid up to 31st March 2011.
To insulate Indian exports from the decline in demand from developed countries, the policy focuses on diversification of Indian exports to other markets, especially those located in Latin America, Africa, parts of Asia and Oceania and to achieve diversification of Indian exports, 26 new countries have been included within the ambit of Focus Market Scheme and the incentives provided under Focus Market Scheme have been increased from 2.5% to 3%.
There has been a significant increase in the outlay under ‘Market Linked Focus Product Scheme’ by inclusion of more markets and products. This ensures support for exports to all countries in Africa and Latin America.
EPCG Scheme at zero duty has been introduced for certain engineering products, electronic products, basic chemicals and pharmaceuticals, apparel and textiles, plastics, handicrafts, chemicals and allied products and leather and leather products and the existing 3% EPCG Scheme has been considerably simplified, to ease its usage by the exporters.
The Government recognized ‘Status Holders’ contribute approximately 60% of India’s goods exports. To incentivise and encourage the status holders, as well as to encourage Technological up-gradation of export production, additional duty credit scrip at 1% of the FOB of past export shall be granted for specified product groups including leather, specific sub sectors in engineering, textiles, plastics, handicrafts and jute.
Source : fibre2fashion.com