The Hindu Business Line : A macro policy with micro focus too

By addressing a large number of their concerns to the extent possible, such as reducing the transaction cost, continuing with the DEPB Scheme, neutralising many of the duties and levies on inputs in export production, and giving special support and incentives to several traditional industries, especially those associated with the rural and semi-urban areas and agro-allied sectors, the Policy has addressed a large cross-section of the exporting community.

It has, thereby, ensured that its twin objectives of doubling India's global share in merchandise trade in five years, and maximising generation of employment in the export industries can be achieved.

A "refreshing and challenging" policy for exporters, its bold sector-specific initiatives will definitely impart a strong impetus to the growth of exports and employment.

Doubling India's percentage share of global merchandise trade in the next five years (2004-09), means raising exports from $61.84 billion (2003-04) to around $195 billion at a compound annual growth rate of 33 per cent, assuming that world trade grows by 10 per cent.

Maintaining such high double-digit growth on a sustained basis for the next five years would certainly be a challenging task for exporters.

But given the support and the progressive mindset of the policy-makers, the exporters will surely go all out to match the Government's expectations.

The Policy is comprehensive, even if its canvas is vast. A look at some positive features. For instance, the initiatives taken for promoting traditional sectors such as agriculture, handicraft, handloom, leather, and gems and jewellery.

This will definitely lead to greater employment generation. The increase in duty-free entitlement, from 3 per cent to 5 per cent for garments and handicrafts is a good step, and I think it would encourage exporters to use quality trimming and embellishments to move up the value chain.

Another equally laudable step is the introduction of the Duty-Free Entitlement Scheme for fruits, vegetables, flowers, minor forest produce and their value-added products.

This should help these sectors become more competitive. However, it would have helped to a greater extent had some encouragement been given to processed products because, at present, only around 0.2 per cent of the horticulture products are processed.

The Commerce Minister has conceded to the long-standing request to lower the threshold limit for status holders and grant double weightage to tiny/cottage/SSI, handicraft, handloom exporters, products manufactured in the North-East and Jammu and Kashmir, besides agro-allied and service sectors.

The decision in this direction will encourage SMEs become status holders and, at the same time, help in export marketing of the products manufactured by units in the SSI/tiny and cottage sectors.

Another suggestion of the FIEO, which is reflected in the Policy, is in the decision to bring down the eligibility limit under the Duty-Free Entitlement Scheme for status holders to Rs 10 crore.

This decision will make more exporters eligible for the scheme and, thereby, lead to expansion of the country's exporter base.

There are, of course, many more features that make this Policy so export-friendly, which includes the decision to set up a high-level grievance redressal mechanism which is a welcome step because not only will it reduce litigation, it will help to settle grievances expeditiously.

(The author is President, Federation of Indian Export Organisations.)

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