In a major boost to the ailing export sector, the Centre on Wednesday announced Rs.625-crore incentives to some industries like electronics, garments, jute and carpet, even as exports registered 34.8 per cent growth at $16.09 billion in February.
“We are extending help to some sectors that are still in the red, which include electronics, jute, carpet and garments. Over Rs.400-crore worth of incentives will go for exports of about 300 garment items to the U.S. and Europe, while the balance will be given for exports of 200 engineering, electronics and agro chemical items to 15 countries, including China and Japan,” Union Commerce and Industry Minister Anand Sharma told journalists here.
Exports to these nations would be covered under the Market Linked Focus Product (MLFP) under, which exporters can claim 2 per cent of their merchandise value for one year. The incentives would be given for six months from April 1, he added.
Meanwhile, revival in some segments like tea, coffee, plastics, chemicals and man-made yarns and fabrics, saw exports picking up fast. In February exports registered 34.8 per cent growth for the fourth straight month, but due to dismal performance up to November 2009, cumulative exports during the April-February period declined by 11 per cent to $153 billion.
Hailing the government's decision to give incentives to the lagging export sector, Federation of Indian Export Organisations (FIEO) President A. Sakthivel said: “The new incentives will impart competitiveness to sectors that are still in red. These measures will push diversification both at product and market levels.”
Similarly, Engineering Export promotion Council (EEPC) Chairman Aman Chadha said the incentives would help the sector, which was lagging behind due to slump in demand. Mr. Sharma said exports in the current fiscal were likely to be in the range of $170 billion against $185 billion in 2008-09.
“I expect we would reach $168-169 billion,” he said.
Exports of electronic items, jute and carpet dipped by 28.6 per cent, 22.4 per cent and 96 per cent, respectively, in February. However, Mr. Sharma expressed hope that the exports would expand between 15 and 20 per cent in the financial year beginning on Thursday. In the Foreign Trade Policy announced in August last, the government had set an export target of $200 billion in 2010-11. Meanwhile, imports rose by 66.1 per cent to $25.06 billion in February from $15.08 billion in the corresponding month last fiscal.