Exports reach $155 billion; 2008-09 target hiked to Rs200 billion news
11 April 2008

The country's exports in 2007-08 has exceeded $155 billion, just short of the targeted Rs160 billion. India's total merchandise trade (both exports and imports) is expected to reach $400 billion during 2007-08, (excluding $125 billion in 'trade in services') accounting for nearly 1.5 per cent of world trade.

Releasing the 'annual supplement to foreign trade policy' in New Delhi today, Union minister of commerce and industry Kamal Nath said that the foreign trade policy initiatives had more than doubled India's exports in four years from $63 billion in 2004, registering a cumulative annual growth rate of 23 per cent, year on year, way ahead of the average growth rate of international trade.
 
He also said that the increased trade activity had generated additional employment of 136 lakh, since exports were not just about earning foreign exchange, but boosting the manufacturing sector, creating large scale economic activities and generating fresh employment opportunities.

Lauding the achievements of exporters for the achievement despite the appreciation of the rupee, high interest rates, spiralling oil prices, a slowdown in major trade markets, and withdrawal of some benefits under the 'general system of prefernce' (GSP) to India by other countries, Nath stressed that India should achieve a 5-per cent share of world trade by 2020.

''As a means to achieve this, an export target of $200 billion has been set for 2008-09,'' he disclosed .

He also announced fresh measures in the final annual supplement to FTP 2004-09, that include:

  • Extension of DEPB scheme till May 2009
  • Interest at 6 per cent for delayed refunds
  • Rreduction of customs duty payable under EPCG scheme from 5 per cent  to 3 per cent
  • Lowering of average export obligation under EPCG scheme
  • Extension of income tax exemption to 100 per cent EOUs beyond 2009
  • Additional duty-free credit of 2.5 per cent under VKGUY
  • Additional credit of 5 per cent for sports and goods industries under 'focus product scheme'
  • Special focus initiatives for IT sector
  • Ensuring zero-rating of exports for domestic taxes
  • Enhanced incentive of 2.5 per cent under 'focus product scheme'
  • Addition of 10 more countries in the 'focus market scheme'
  • Iinclusion of IT and ITeS and R&D in natural sciences under the 'industrial park scheme'
  • Establishment of EPC for telecom
  • Extension of re-import of branded jewellery to one year

To reduce transaction costs for exporters Nath proposed certain additional measures such as:

  • Bringing of 'advance authorization scheme' and EPCG Scheme under the EDI from 1 July 2008
  • Treating all EDI ports as single port where there is no requirement of TRA under the 'advanced authorisation scheme'
  • Payment of duty under EPCG scheme through debit of duty credit from 1st January 2009
  • Reduction of application fee for duty credit scrips and EPCG authorisation from Rs5 per thousand to Rs2 per thousand
  • Reduction of application fee for importer and exporter code from Rs1000 to Rs250; reduction of fee for supplementary claims from 10 per cent to 2 per cent.

To  address the structural constraints that exporters face, Nath announced the setting up of a joint task force (JTF) to plan an integrated strategy to  address these issues. He said the JTF would have representation from the central and state governments, local bodies, industry and exporters to evolve a detailed action plan to achieve this objective.

The JTF will be mandated to look at (1) development of world-class infrastructure to facilitate trade involving an investment of over $800 billion; (2) measures to ensure trade facilitation through EDI to match world-class standards; (3) development of global manufacturing hubs in selected sectors such as auto-components, gems & jewellery, textiles, petro-products etc.; (4) development of global services hubs in IT , KPO, industrial design, R&D and product testing; (5) development of a chain of sector-specific skill-development institutes; and (6) encouraging e-commerce through e-governance.

Nath also said that the government viewed special economic zones (SEZs) as vehicles of industrialisation and employment generation. Underling that SEZs currently provide employment to more than 2.8 lakh people and the projected exports from SEZs would reach Rs.1,25,000 crore by this year, he emphasised the validity of the basic policy relating to SEZs.

New policy for IT, telecom
The government has announced that the information technology (IT) sector would be brought under the special focus initiative this year.

Emphasising the need to strengthen India's manufacturing and export capabilities in the IT hardware sector, Nath said that the specific items of this sector should be made eligible under the high tech product export promotion scheme. ''Funds would also be specifically earmarked for this sector under the ongoing MDA and MAI Schemes'', he added.

Noting that India's expertise in IT software is internationally established, Shri Kamal Nath also announced the setting up of a new Export Promotion Council for Telecom Sector to provide institutional support to exports from the telecom sector.

He also that under the industrial park scheme administered by IPP, the Foreign Trade Policy has also included IT, ITeS and R&D in natural sciences and engineering as industrial activities permitted in the parks.


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Exports reach $155 billion; 2008-09 target hiked to Rs200 billion