The government of India has announced proactive steps to minimise the impact of the global economic slowdown on the Indian economy. A ''multi-dimensional'' fiscal stimulus package has been prepared that is expected to help boost output across sectors and stoke demand (See: Centre cuts excise by 4 per cent; unveils Rs30,700 crore stimulus).

In order that the forex earning exporters get the required stimulus, the package has some significant incentives for them. These include:
 
i) Pre and post-shipment export credit for labour intensive exports, i.e., textiles (including handlooms, carpets and handicrafts), leather, gems & jewellery, marine products and SME sector is being made more attractive. The government will bear the cost 2 per cent upto 31/3/2009 subject to minimum rate of interest of 7 per cent per annum

ii) Additional funds of Rs1,100 crore will be provided to ensure full refund of Terminal Excise duty / Central Sales Tax

iii) An additional allocation for export incentive schemes of Rs.350 crore will be made

iv) A Rs350 crore government back-up guarantee will be made available to Export Credit Gaurantee Corportation (ECGC) to enable it to provide guarantees for exports to difficult markets / products

v) Exporters will be allowed refund of service tax on foreign agent commissions of upto 10 per cent of FOB value of exports. They will also be allowed refund of service tax on output services while availing of benefits under Duty Drawback Scheme
 
Welcoming the fiscal stimulus package announced by the government today, the CII president, K V Kamath said, "With the fiscal package and the monetary policy announcements made by RBI yesterday, the authorities are sending a clear message from the government and the regulators that a multi pronged approach is being adopted to ensure that the impact of the global slowdown on India is managed in an orderly way and India continues to record reasonable growth rates. This package is welcome."