The government on Tuesday announced a slew of measures to help exporters including the extension of a subsidised bank loan scheme and easier procedures to cut the time and cost of shipments to counter a demand slump in Europe, India’s biggest overseas market.
India also a set a 20% export growth target for the fiscal year 2012-13, which, if achieved, will take exports well past $360 billion by next March compared to $303 billion in the past fiscal, when exports grew by nearly 21%.
The existing subsidised bank loan scheme for exporters has been extended by a year to March 31, 2013 under which specified exporters can access bank loans at 2% cheaper than regular borrowing rates. The government pays the rate difference to the banks directly to ensure that lenders do not suffer in providing cheaper credit.The scheme has been extended to toys, sports goods, processed farm products and readymade garments apart from handlooms, handicrafts and carpets.
“It is indeed a difficult task to present a (trade) policy which aims for rapid growth in exports in the face of weak global demand and the unabated persistence of the global economic crisis,” commerce and industry minister Anand Sharma said.
He was unveiling the annual supplement to the five-year trade policy here.
India's year-on-year export growth slowed to a near flat 3.23% in April as orders dried out from Europe, which has been hit by worries on mounting soverign debt and political unrest.
Industry leaders welomed Sharma's package.
“The announcements have exceeded our expectations. Labour-intensive sectors like textiles have been the thrust area of the policy. We welcome the steps,” said Rafeeq Ahmed, president of the Federation of Indian Export Organisations.
Sharma raised the pitch for slashing interest rates, which have been steadily raised over the past three years to contain inflation, which choked demand and thus growth. India's economic growth plunged to a 9-year low of 5.3% in the January-March quarter.
“I would urge them (RBI) to look at the present depressed investment climate and the disturbing numbers in manufacturing and core sectors and IIP numbers,” said Sharma.