India’s trade policy update sets $200 bn exports targetApril 11th, 2008 - 6:20 pm ICT by admin
New Delhi, April 11 (IANS) India unveiled its Foreign Trade Policy update Friday that sets an export target of $200 billion for 2008-09 and bans export of cement with a twin focus of curbing price rise and boosting trade. Unveiling the policy update here, Commerce Minister Kamal Nath said he was also withdrawing the incentives on export of primary steel and will keep a close watch for any immediate steps that would be needed to rein in inflation.
He said India achieved merchandise exports worth $155 billion - albeit short of the target of $160 billion - in 2007-08 despite setbacks on account of rupee appreciation, high interest rates and spiralling prices of inputs.
“The remarkable achievements in trade and commerce of the past four years gives me the confidence to spell out an even more ambitious target - that of achieving a five percent share in world trade by the year 2020,” Kamal Nath said.
“Ambitious it may be, but achieving it is not impossible. It means we would have to ensure an average annual growth rate of 25 percent consistently for the next 12 years,” the minister said.
He also said over the past four years, the exporting community had generated 13.6 million new jobs even as the share of trade in goods and services had topped 50 percent of India’s gross domestic product (GDP).
“This is unprecedented in India’s modern economic history.”
With inflation hitting a 41-month high of 7.41 percent for the week ended March 29 on account of higher food and commodities prices, the minister said export of cement would be banned and withdrew all sops to steel exports.
“The government has decided to put a ban on cement exports while incentives on exporting primary steel products have been completely withdrawn,” Kamal Nath said, after unveiling the update before the representatives of various export promotion organisations and industry chambers here.
The measures announced by the commerce minister left the industry and exporters happy. “We think, we have got more than we could have expected,” said Ganesh K. Gupta, president of the Federation of Indian Exporters Organisation (FIEO).
“The target of $200 billion set by the commerce minister is achievable. This is an overall target and not sector-specific and we will work together to ensure we meet the target,” Gupta added.
The Associated Chambers of Commerce and Industry (Assocham) complimented Kamal Nath for the steps to extend incentives to exporters, but said the $200 billion export target was too ambitious - $170 billion would have been more realistic.
The minister also highlighted the role played by special economic zones (SEZ) in pushing exports, despite a strong rupee, and generating jobs. “The government sees SEZs as vehicles of industrialisation and employment generation.”
To help exporters tide over a strong rupee, which appreciated 11 percent over the past year, the trade policy also had some remedial measures such as one-year extension of the income tax rebate scheme for export-oriented units.
Noting that there were still several structural problems in India’s external sector, Kamal Nath also announced the setting up of a joint task force to plan an integrated strategy to tackle these issues in an integrated manner.
With representatives from governments, industry and exporters, the task force, he said, will evolve an action plan to develop world-class infrastructure for exports with an investment of $800 million, among its other mandates.
The task force will also suggest measures on trade facilitation, setting up of global manufacturing hubs in selected sectors and in the development of a chain of sector-specific skill-development institutes, the minister said.
Some major highlights of the policy included:
- New export promotion council for the telecom sector
- Extension of duty entitlement passbook scheme by another year
- Duty cut on export promotion capital goods scheme to 3 percent
- One-year extension of lower interest rates for small exporters
- One-year extension of tax exemption for export oriented units
- Relief to sectors affected by rupee appreciation
- Sops for exporters of toys, sports goods
- Cement exports banned
- All sops withdrawn on export of steel
- 10 more countries added to focus market scheme
- Computer hardware also under special focus initiative
Tags: ambitious target, close watch, commerce minister, commodities prices, economic history, export promotion, export target, gross domestic product, high interest rates, kamal nath, merchandise exports, new jobs, primary steel, promotion organisations, remarkable achievements, setbacks, sops, steel exports, steel products, week ended march