The government on Thursday announced Rs 900 crore fiscal incentive for the exporters and simplified procedures aimed at helping traders tide over an uncertain global market amid shrinking demand from two major regions-the USA and Europe.
The new sops include tax credit for shipments on select items such as engineering, pharmaceutical and chemical goods just days after the Reserve Bank of India announced concessional interest rates for exporters.
"We have been able to secure interest subvention of 2% on rupee export credit which have been extended up to the end of the current financial year," said Anand Sharma, commerce and industry minister while unveiling the annual supplement of the Foreign Trade Policy (2009-2014).
Handicrafts, handlooms and carpets exporters will be eligible for loans at 7%. The government will directly subsidise the banks for these loans.
New sops would get special bonus of additional 1% of export value between October and March this year (2011-12).
Exports toLatin America, Africa and Commonwealth of Independent States (CIS) regions will also be eligible for additional 1% duty credit besides 3% already being given.
"In a ballpark range, excluding interest subvention, it ( the size of the package) will be around Rs 800-900 crore. For interest subvention it will be around Rs 800-Rs 1,000 crore...a total of about Rs 1,700 crore," said Rahul Khullar, commerce secretary.
Exporters cheered the sops. "It is a Diwali bonanza," said Ramu S Deora, president of the exporters' body FIEO.