Steps aimed at helping reverse a prolonged contraction in merchandise exports
The government is considering several measures, such as offering incentives for small exporters and a package to revive Special Economic Zones (SEZs), to help reverse the trend of a prolonged contraction in merchandise exports since December 2014.
Labour-intensive export sectors and organic food producers will get concessions and a package is on the anvil for SEZs so that they can utilize large tracts of unused land available with them.
Also being considered are steps such as categorising the entire export credit given by all lenders separately under priority sector lending without riders, ensuring better coordination with Indian missions overseas, as well as relaxing norms for the Export Import Bank of India (Exim Bank) and Export Credit Guarantee Corporation of India (ECGC) to give them greater operational flexibility.
Setting up of three dedicated zones for manufacture of Active Pharmaceutical Ingredients (API or drug raw materials) and other pharmaceutical items, incentives for the bio-tech industry especially for skill development, sops for manufacture and export of electronic items, besides targeted measures to address the problems of small importers of steel items, exporters in the gems & jewellery and sea food sectors, are the other steps being considered.
These proposals will be taken up soon with other Ministries and regulatory authorities, Commerce & Industry Minister Nirmala Sitharaman said after the Board of Trade (BOT) meeting. The 72-meber Board is a government-industry panel looking into measures to boost exports. The recently reconstituted Board chaired by Sitharaman held its first meeting on Wednesday.
Indian exports have declined from $314 billion in FY’14 to $310 billion in FY’15. Exports in FY’16 are expected to shrink further to nearly $260 billion.
“The Prime Minister is keen that the government is constantly engaged with the export sector to ensure that their problems are sorted out expeditiously. To ensure consistent high rates of economic growth, possibly closer to 10 per cent, we need exports sector also do to well,” Sitharaman told reporters. “We will hold interactions with Indian High Commissions and Embassies along with their commercial and economic wings to make them more vibrant and understand requirements of exporters.”
Trade bodies demanded better infrastructure to shore up exports and called for tax benefits to be extended to small and medium units.
Demanding fiscal support for modernisation and expansion of the production base, S C Ralhan, President of the apex body of exporters FIEO said investment-linked tax benefits should be given to small and medium units needing huge capital and generating employment.
Naushad Forbes, President of the industry body CII, said strategies need to be evolved to increase high value added or advanced manufacturing exports, help exporters comply with international best practices and standards, as well as address problems relating to poor infrastructure, inadequate trade finance, high logistic costs and inflexible labour laws.
Besides, greater participation of the States is also required to boost exports, he added.