In an attempt to give a major boost to exports and save jobs in export-oriented industries, the new Foreign Trade Policy unveiled by Commerce and Industry Minister Anand Sharma on Thursday sought to give a stimulus of incentives that included giving extended tax holiday and duty refund to exporters and allowing duty-free capital goods import to insulate them from global recession and economic slowdown.
Unveiling the five-year policy, Mr. Sharma promised to re-visit it after two years keeping in mind the current economic uncertainty.
The Minister has set an ambitious target of $200 billion worth exports for the next fiscal, a feat the country failed to achieve in 2008-09 due to a slump in global demand.
“India has not been affected to the same extent as other economies of the world; yet our exports 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,'' he said while presenting his first Foreign 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 2009-10. “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.
Doling out incentives for exports, Mr. Sharma announced extension of income tax holiday for export units for one more year and continuance of the duty refund scheme till December 2010, along with enhanced assistance for the scheme for development of markets. The aim of the policy, which would be reviewed after two years, was to arrest and reverse the declining trend of exports, he said.