India Announces Special Incentives for Exporters

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Oct. 19 – The government of India announced a Rs. 900-crore package for exporters to assist them to fight with the slowdown in developed markets and rising input costs. The Reserve Bank of India has already declared an interest subsidy of 2 percent on rupee export credit for handicrafts, handlooms, carpets and small and medium exporters. Along with the interest financial support, the total relief package for exporters stands at nearly Rs. 1,700 crore.

Sectors which would take advantage of the government’s move include engineering goods, pharmaceuticals and chemicals, and apparel. The Commerce Minister of India unveiled a special focus market scheme, which would facilitate the branching out of the country’s exports to new locations. Under the scheme, an additional 1 percent duty credit would be provided to exporters who ship their goods to markets in Latin America, Africa and CIS countries. The total number of countries in the scheme is 43 – including new entrants Cuba and Mexico.

According to the Federation of Indian Export Organization, 50 products in engineering, pharmaceuticals and chemicals would get the exceptional bonus of an additional 1 percent of export value between October and March in the current financial year.

The government had set up a board comprising the finance secretary, commerce secretary, and secretary of financial services which would address the issues of availability of dollar credit.

The commerce minister was certain of meeting the US$300 billion target for exports set for 2011-12. Exports are likely to have risen 52 percent to US$160 billion in the first half of the current financial year on the back of strong performance from engineering goods and petroleum products.

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