Export incentives soon to be announced

Shri Anand Sharma the Union Minister of Commerce, Industry & Textiles today chaired the interaction with FIEO and all Export Promotion Councils and commodity Boards here today. Shri Sharma in his opening remark said, the purpose of today™s consultation is to conclude the process which DGFT & Commerce Secretary have been doing throughout the year and I thought that before we come out with the export incentives for the current financial year we must have this brainstorming exercise. On 11th October 2011, I am convening the meeting of the Board of Trade after that we will announce the incentives for this year.

The stakeholders addressed major concerns to the Minister, which can be summed as: The sharp cut back in the drawback rates for most exporting items at a time when world demand is slowing down and volatility in the exchange rate. Those bodies who getting benefits under this scheme said, This will have considerable impact in slowing down exports. The high growth rates witnessed during the first two quarters was because the exporters wanted to utilize the benefit of the DEPB scheme. Another point was the high cost of rupee export credit in view of the RBI`s tightening monetary policy. They requested the Minister for an Interest Subvention scheme which should be introduced soon for exporters.

After the meeting talking to media Shri Sharma said, We have number of schemes like FMS, MLFPS and VKGU…so continuation of the schemes……market diversification has done well on interest subvention. The cost of credit has been a matter of very serious concern to the industry. It has gone up considerably high which is making the Indian manufacturing output much less competitive globally. There is also the weakening of rupee and the exporters which had booked orders are facing new challenges because there have been hoarding up of orders because of the global slowdown… if need be I will again discuss these issues with the FM…DGFT and the Commerce Secretary will talk to Finance Secretary and concerned officials hopefully within the next 10 days. The demand has weaken in traditional destinations particularly in the Europe…strong growth is there in Africa, ASEAN and S America…but America and EU remain strategically very important for our trade, he added.

The Textiles Export Promotions Councils put forth the problems faced by the Textiles Industry in exporting, which are: The rising labor cost driven by high inflations; cost of power for the industry; anti dumping duty imposed by some importing countries and need to tab new markets like Egypt under Focus Markets. They also suggested that product diversification is the need of the hour and Technical Textiles can be one of the areas to tap and harness in this regard. The Minister asked all the bodies to harness the benefits of FTAs and CECA/CEPA with the partner countries for export promotion and growth.

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