The Hindu Business Line : Export target set at $120 b; sector-specific steps unveiled

HIGHER TRAJECTORY: The Union Minister for Commerce and Industry, Mr Kamal Nath, flanked by the Ministers of State for Industry, Mr Ashwini Kumar (left), and Mr Jairam Ramesh, releasing the Annual Supplement to the Foreign Trade Policy in the Capital on Friday. — Kamal Narang

New Delhi , April 7

Unveiling a slew of measures to put Indian exports on a higher growth trajectory and create greater employment opportunities, the Annual Supplement to the Foreign Trade Policy (2004-09) has come up with sector-specific initiatives to make India a hub for gems and jewellery exports and a major refuelling stop for international flights.

Releasing the Annual Supplement here on Friday, the Commerce and Industry Minister, Mr Kamal Nath, set a 20 per cent merchandise export growth target (about $120 billion) for 2006-07. He expected India's exports to exceed $150 billion by 2009.

Mr Kamal Nath pointed out that India's exports had recorded annual growth of over 25 per cent during the last two fiscal to touch the `auspicious figure' of $101 billion in 2005-06.

WTO-compatible schemes

Two new `WTO-compatible' schemes — Focus Product Scheme (FPS) and Focus Market Scheme (FMS) — have been introduced with the aim to promote specific products and overseas export markets, respectively, and to provide employment in semi-urban and rural areas.

While the scheme focussing on specific market allows duty credit facility at 2.5 per cent of the f.o.b. value of exports of all products to notified countries mainly in Latin America and Africa, the Focus Product Scheme allows similar benefit on the f.o.b. value of exports on 50 per cent of the export turnover of notified products such as value added fish and leather products, stationery items, fireworks, sports goods, handloom and handicraft items.

Queried on the employment growth target for the current fiscal, Mr Kamal Nath said that the initiatives could generate an additional two million jobs in the current year.

Fillip for exporters

A new scheme `Duty Free Import Authorisation Scheme' has been launched to enable exporters to import the required inputs before exports and also allow them to transfer the scrip once the export obligation is completed. The scheme clubs the existing Advance Licence Scheme (ALS) and the Duty Free Replenishment Certificate (DFRC) scheme. DFRC would be phased out from April 30.

Imports made under this authorisation would be exempt from payment of basic customs duty, additional customs duty, education cess, anti-dumping duty and safeguard duty, if any.

To make India a major refuelling stop, the Annual Supplement has now said that supplies to international flights would be treated as exports.

As an export facilitation measure, the Annual Supplement has also extended the export obligation period under the export promotion capital goods scheme (EPCG) by two years. Moreover, certain flexibilities have been introduced in the conditions relating to maintenance of average export performance under the EPCG scheme.

To encourage services exports, a number of features have been added in the `served from India scheme' including the benefit of transfer of both the scrip and imported input to a group service company. Hitherto, transfer of imported material was only allowed.

Mr Kamal Nath said that India's non-oil imports for 2005-06 stood at $97 billion and the oil import bill stood at $ 43 billion. He pointed out there was no non-oil trade gap during the year.

"We expect our non-oil trade surplus to be in excess of $ 4 billion next year," he said.

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