Until now India''s trade policy document was called the Exim Policy which spelt out India''s trade policy guidelines up to 2007. This policy essentially stated that India''s share of global trade, which is currently at around 0.7 per cent would go up to 1.5 per cent by 2007.

Well, nothing''s wrong with that — but now we have a new government and a new commerce minister who has to do something striking to attract attention. So he scraps the Exim policy and cobbles up a new document called the New Trade Policy, which will now guide India''s global trade up to 2009.

According to commerce and industry minister Kamal Nath, if India is to become a major player in world trade, an all encompassing, comprehensive view needs to be taken for the overall development of the country''s foreign trade.

Thus the basic objectives of the new policy are:

To double our percentage share of global merchandise trade within the next five years; and to act as an effective instrument of economic growth by giving a thrust to employment generation.

Exporters of all goods and services, including those from the Domestic Tariff Area, have been exempted from service tax. Exporters with a minimum turnover of Rs5 crore and a sound track record have been exempted from furnishing bank guarantees in any of the export schemes so as to reduce their high transaction cost and tax burden.

Special focus initiatives for sectors such as handicrafts, handlooms, gems and jewellery and leather footwear were announced, besides agriculture. The threshold limit of designated "towns of export excellence" has been reduced to Rs250 crore from Rs1,000 crore in these thrust sectors as well.

A special package for agriculture "Vishesh Krishi Upaj Yojana" to boost exports of flowers, fruits, vegetables, minor forest produce and their value-added derivatives has been announced. The export of these products would qualify for duty-free credit entitlement equal to 5 per cent of the FOB value of exports and capital goods imported under Export Promotion Capital Goods for agriculture would be duty-free.

In another new scheme, "Target Plus," exporters would be entitled to duty-free credit based on incremental exports substantially higher than the general annual export target. For incremental growth of over 20 per cent, 25 per cent and 100 per cent, the duty-free credits would be 5 per cent, 10 per cent and 15 per cent, respectively, of the FOB value of incremental exports.

The duty-neutralisation scheme on imported inputs, Duty Entitlement Pass Book (DEPB) would be continued till it is replaced by a new scheme, to be drawn up in consultation with exporters. The board of trade would be revamped to ensure continued interaction between other wings of the government and the board of trade to boost exports. The minister declared a new rationalised scheme of categorisation of status holders as "Star Export Houses", designating them from ''One Star'' to ''Five Star'' depending on their total exports during the current and previous three years.

"The entry level for qualifying for status is now Rs15 crore in three years. We are confident that this will bestow status on a large number of hitherto unrecognised small exporters," the minister said.

A new scheme to establish Free Trade and Warehousing Zones (FTWZs) to make India a global trading hub has been announced. This is aimed at creating "trade-related infrastructure to facilitate the import and export of goods and services with freedom to carry out trade transactions in free currency," Kamal Nath said.

Foreign direct investment would be permitted up to 100 per cent in the development and establishment of the zones and their infrastructure facilities.

Each zone would have a minimum outlay of Rs100 crore and units in the FTWZ would qualify for all other benefits as applicable to units in the Special Economic Zones. The policy provides special benefits to 100 per cent export-oriented units (EOUs), including exemption of EOUs from service tax in proportion to their exported goods and services, besides permission to retain 100 per cent of export earnings in Exchange Earners Foreign Currency (EEFC) accounts.

A biotechnology park scheme, getting all facilities of 100 per cent EOUs, is proposed, as application of biotechnology is recognised to pay rich dividends in terms of new products and technologies.

For services exports, Kamal Nath introduced a "Served From India" scheme as a brand instantly recognised abroad, under which individual service providers earning foreign exchange of at least Rs10 lakh would be eligible for a duty credit entitlement of 10 per cent of the total foreign exchange earned by them.

In the case of stand-alone restaurants, the entitlement would be 20 per cent, whereas for hotels it would be 5 per cent.

There would be an exclusive Services Export Promotion Council to map out opportunities in key services in principal markets and foster strategic market access programmes, including brand building in concert with recognised nodal bodies of the services industry.

The policy also announced the setting up of grievance redressal for trade and industry, besides simplifying procedures on all matters relating to exporters'' interaction with the DGFT in a bid to reduce transaction cost.

The policy on the face of it looks ambitious and the onus is on the minister and his team of officials to deliver the goods.