Faced with a scenario of constantly dwindling exports, the Indian government today outlined an incentive package worth Rs3,000 crore; but this failed to satisfy export-oriented industries.
Among other measures, commerce and industries minister Anand Sharma announced an extension of the popular EPCG (Export Promotion of Capital Goods) scheme to all sectors, and sops for SEZs to boost shipments.
The new initiatives are part of the annual supplement to the Foreign Trade Policy (FTP).
The EPCG scheme allows exporters to import capital goods at zero duty. It would be extended into the current financial year and would be applicable to all sectors, Sharma said.
"We have decided not only to extend the zero duty EPCG scheme beyond March 2013, but also to merge it with 3 per cent EPCG scheme,'' the minister said.
On special economic zones (SEZs), Sharma said the minimum land area requirement for setting up these export-oriented zones has been reduced to half; and there would be no ceiling for IT and ITeS SEZs.
"We have taken note of the fact that there are acute difficulties in aggregating large tracks of uncultivable land which is vacant and contiguous and we have decided to reduce the minimum land area requirement by half for different categories of SEZs.
"There would now be no minimum land requirement for setting up IT/ITeS SEZs and only a minimum built up area criteria would need to be met by SEZ developer," Sharma announced.
Industry clearly expected more."We expected some bold measures like fiscal incentives on export income," said Rajkumar Dhoot, president of the Associated Chambers of Commerce and Industry of India (Assocham).
Rafeeque Ahmed, president of the Federation of Indian Exports Organisations (FIEO), said, ''Nothing big has been announced in the foreign trade policy. Still, we feel exports should grow around 10 per cent this fiscal year."
India's exports declined by 1.76 per cent to $300.6 billion in 2012-13, pushing up the trade deficit to $190.91 billion. This in turn has weakened the rupee and increased the country's dependence on volatile foreign capital flows into its financial markets to bridge the current account gap.
(Also see: Govt extends EPCG scheme, allows smaller SEZs)