India today extended tax holiday and duty refund for exporters, while allowing duty free capital goods import under its Foreign Trade Policy to insulate them from protectionism induced by recession abroad.
Unveiling the five-year policy, the Commerce Minister, Anand Sharma, set a target of $200 billion worth exports for next fiscal, a feat that India failed to achieve in 2008-09 due to a slump in global demand in the face of financial crisis.
“India has not been affected to the same extent as other economies of the world, yet our exports have suffered a decline in the last 10 months due to a contraction in demand in the traditional markets. The protectionist measures being adopted by some of these countries have aggravated the problem,” Mr. Sharma said, presenting his first trade policy.
While exports for the April-June quarter contracted by 31 per cent, Mr. Sharma set a growth target of 15 per cent for financial year 2010.
“I would be hesitant to hazard a guess on the nature and extent of this recovery and the time the major economies will take to return to there pre—recession growth levels,” he said, encouraging exporters to look beyond traditional markets like the U.S. and western Europe.
Extension of income tax holiday for export units for one more year and continuance of duty refund scheme till Decemer 2010 and enhanced assistance for the scheme for development of markets are among the measures in the FTP.
