Thaindian News

New Delhi, Oct 13 (IANS) The Indian government Thursday announced various incentives, including interest subsidy, worth around Rs.1,700 crore to boost the growth of exports in view of the slowing demand in the US and European markets.

“It is difficult to put the number, but my guess is the total financial outgo will be around Rs.1,700 crore,” Commerce Secretary Rahul Khullar said at a press conference here.

He said nearly half the financial outgo would be in the form of interest subvention or subsidy on interest. “Interest rate subvention itself will cost around Rs.800-1,000 crore. Other schemes will cost roughly around Rs.800-900 crore,” he said.

Commerce and Industry Minister Anand Sharma Thursday announced the annual review to the Foreign Trade Policy 2009-14.

The minister announced several schemes to keep the growth momentum in the foreign trade.

“We have been able to secure interest subvention of two percent on rupee export credit, which has been extended up to the end of the current financial year,” Sharma said.

The subsidy will be available to exporters with retrospective effect from April 1, 2011, until March 31, 2012. The earlier interest subsidy scheme had lapsed at the end of last fiscal.

To promote market diversification, the minister said the government would provide four percent duty credit to exporters under a new Special Focus Market Scheme.

“We are introducing today a special focus market scheme. It will cover 41 countries - 12 from Latin America, 22 from Africa and seven from CIS (Confedration of Independent States) countries,” Sharma said.

The government has also introduced a new scheme to provide special assistance to engineering, pharmaceutical and chemical sectors for the period of 6 months.

The new Special Bonus Benefit Scheme will cover 50 products, including hand tools, gas compressors, motorcycles and goods vehicles, carbon black, potassium iodide, niacin amide, erythromycin and its derivatives and ciprofloxacine.

Under the scheme, duty credit of one percent will be given. The scheme is applicable from Oct 1, 2011 to March 31, 2012.

Reacting on the announcement, FICCI secretary general Rajiv Kumar said the measures would help Indian exporters in the current challenging global environment.

“Additional benefits in terms of Special Focus Market Scheme, Special Bonus Benefit Scheme and support to apparel sector would be vital in stepping up the competitiveness of our exports,” he said.

In view of the slowdown of demand in the US and the European countries, the government has extended the market linked focus product scheme to these countries as well.

India’s exports have risen by 52.1 percent to $160 billion in the first six months of the current fiscal.

The growth in exports has declined in the recent two months mainly because of the slowdown in demands of Indian goods in the US and European countries due to economic uncertainties.

Sanjay Budhia, chairman of CII’s National Committee on Exports and Imports, said the government’s incentives have come as a rescue for the exporters who were suffering from lower profit margins due to economic uncertainties in the US and Europe.