With the Union Government likely to announce the Foreign Trade Policy on Wednesday, industries here expect measures that will encourage exports.
Be it in textiles or engineering, Coimbatore region has a large number of exporting units and apart from the budgetary support, these units get benefits under several schemes such as focus market, focus product programmes.
Industry sources here point out that since India is a signatory to the WTO agreement, it cannot offer new incentives for exports. In the case of the textile and clothing sector, the existing incentives in the focus market and focus product schemes and EPCG scheme need to be phased out by 2018. Hence, the Government might start phasing out these schemes from this year.
While schemes such as the Technology Upgradation Fund and duty drawback will continue, those that are based on exports will be phased out. The Government might start doing it this year, the sources say.
Weakening of the Euro has affected exports for almost all the sectors. Since European buyers quote the rates in Euro, the exporters have also gradually shifted to Euro and they are hit by the weakening of Euro.
In Coimbatore region, foundries that are into stainless steel castings are affected by this.
When there is a general slowdown in the market, and industries are hit by problems such as weakening of Euro, the Government might not be able to provide much relief, says a leading foundry and pumpset manufacturer here.
Further, because of the WTO agreement, the Government will not be able to provide additional export-oriented benefits. Though there was a delay earlier in disbursal of duty drawback amount, it has improved now, he adds.
‘Since India is a signatory to the WTO agreement, it cannot offer new incentives for exports’
