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Sops likely for laggard exports

business Updated: Aug 22, 2010 20:55 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Commerce and industry minister Anand Sharma will unveil the annual supplement to the foreign trade policy on Monday amid expectations of incentives for some sectors such as textile, leather and handicrafts to help them withstand a possible demand slump in two of India's biggest export markets — the USA and the European Union.

Losing momentum

India's exports grew by 13.2 per cent in July, sharply lower than the 30 per cent-plus growth rates clocked in the first three months of this fiscal year, largely due to base effect.

There is also a fear of demand slump in the EU and the US as the major economies roll back their stimulus packages.

India's exports grew by 13.2 per cent in July to $16.24 billion, sharply lower than the 30 per cent-plus growth rates clocked in the first three months of this fiscal year largely due to base effect — a statistical phenomenon that magnifies incremental growth when compared with a low rate in the previous period.

There is also a fear of demand slump in the EU and the US as the major economies of the world begin fiscal consolidation by rolling back the stimulus packages announced two years ago to counter the downturn.

Commerce secretary Rahul Khullar said that in the second half of 2010-11, growth in exports may not match the high rates clocked in the previous few months.

"There is going to be a slowdown in the world in the next six months. . . that would translate into contraction in aggregate demand of our exports," Khullar said.

"We are on the track. Even if we post a 14-15 per cent growth for the remaining period of the year, we will reach $200 billion," he added.

Sources, who did not wish to be identified, said the Commerce Minister is likely to announce a fiscal incentive package to help export sectors such textiles and handicrafts.