Export sectors in red to receive sops

03 Apr '10

2 min read

Even as India's overall exports bagged an impressive 34.8 per cent growth in February, the government announced on March 31, 2010, incentives amounting to Rs 625 crore, for export sectors in the red such as garments, engineering, electronics and agro products.

As the demand for these items in the western economies is yet to pick up, government announced over Rs 400 crore worth of incentives for exports of about 300 garment items to the US and Europe. This incentive is offered to those who fall under the Market Linked Focus Product (MLFP) scheme, two of the biggest markets.

The remaining will be provided to exports of 200 engineering, electronics and agro chemical items to 15 countries including China and Japan. The incentive is timed for six months starting April 1, 2010.

Apparel exports declined by approximately 14 per cent to $862 million in January 2010, indicating a bleak demand for Indian garments in major markets.

According to President, Federation of Indian Export Organisations (FIEO), A Sakthivel, “This new policy is sure to impart competitiveness to sectors that are still in the red, further pushing diversification both at the product and market levels.”

Currency appreciation hit sectors such as garment, handicrafts and leather, which in-turn, prompted FIEO to call for fixed exchange rate for exporters. Fearing the continuous strengthening of the rupee, exporters dreaded losing out heavily against their Chinese counterparts.

Union Commerce and Industry Minister, Anand Sharma pointed that exports in the current fiscal were likely to be within $170 billion against $185 billion in 2008-09. He expects the same to reach $168 – 169 billion in the current fiscal.

Fibre2fashion News Desk - India

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