The new Foreign Trade Policy 2009-14 unveiled by the Union minister for commerce and industry, Anand Sharma in Delhi on Thursday has sought to help exporters in penetrating new markets in these regions. The incentives under Focus Market Scheme (FMS) has been raised from 2.5% to 3% and that under Focus Product Scheme (FPS) has been raised from 1.25% to 2%.

A large number of products from various sectors have been included for benefits under FPS. These include engineering products (agricultural machinery, parts of trailers, sewing machines, hand tools, garden tools, musical instruments, clock and watches, railway locomotives and others), value added plastic products, jute and sisal products, technical textiles, green technology products like wind mills, wind turbines and electric operated vehicles, project goods, vegetable textiles and certain electronic items.

Market Linked Focus Product Scheme (MLFPS) has also been expanded by inclusion of products classified under as many as 153 ITC(HS) Codes at 4-digit level. Some major products are pharmaceuticals, synthetic textile fabrics, value added rubber products and plastic goods, textile madeups, knitted and crocheted fabrics, glass products, certain iron and steel products and certain articles of aluminium among others. Benefits to these products will be provided, if exports are made to 13 identified markets — Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand.

MLFPS benefits would also be extended for exports to additional new markets for certain products. These products include auto components, motor cars, bicycles and its parts and apparels among others. A common simplified application form has been introduced for availing benefits under FPS, FMS, MLFPS and Vishesh Krishi and Gram Udyog Yojana (VKGUY). The government has made higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) schemes.

Doling out other incentives, the commerce minister said 'Given the current economic climate, policy measures being outlined by me are for a two-year period and thereafter we shall take stock for making mid-course corrections.'

He said that the Comprehensive Economic Partnership Agreement with South Korea signed earlier this month would enable Indian products to secure enhanced market access to the growing Korean market. The Trade in Goods Agreement with ASEAN, which will come into force from January 1, 2010, will give enhanced market access to several items of Indian exports in this vibrant economic grouping.

“We would like to achieve an annual export growth of 15% over2010-11 with an annual export target of $200 billion by March 2011. In the remaining three years of this Foreign Trade Policy, the country should be able to come back on the high export growth path of around 25% per annum. By 2014 we expect to double India's exports of goods and services. The long term policy objective for the government is to double India's share in global trade by 2020,” Sharma said.

According to the WTO estimate, India's share in global merchandise trade stood at 1.45% in 2008. It's share in goods and services trade stood at 1.64% in 2008.

The new Foreign Trade Policy aims at improving export related infrastructure, lowering of transaction costs and providing full refund of all indirect taxes and levies. Special thrust has been given to employment-oriented sectors like textiles, leather, handicrafts, marine, gems and jewellery and also pharmaceuticals.

A committee of finance secretary, commerce secretary and chairman of Indian Banks' Association has been set up to ensure that dollar credit needs of exporters are met in a timely manner. Duty Entitlement Pass Book (DEPB) Scheme has been extended up to December 2010 and income tax benefits under Section 10(A) for IT industry and under Section 10(B) for 100% export-oriented units would continue for one additional year till March 31, 2011. Enhanced insurance coverage and exposure for exports through ECGC schemes has been ensured till March 31, 2010. Interest subvention scheme would also continue.

A minimum 15% value addition norm on imported inputs has been stipulated for advanced authorization scheme. The policy has encouraged production and export of green products through measures such as phased manufacturing programme for green vehicles, zero duty Export Promotion Capital Goods (EPCG) schemes and incentives for exports. Exports from the remote northeastern part of the country will get greater assistance. Technological upgradation of exports is sought to be achieved by promoting imports of capital goods for certain sectors under EPCG at zero per cent duty. Through additional duty credit scrips equivalent to 1% of their FOB value of export in the previous year of specified product groups.

A Directorate of Trade Remedy Measures would be set up to help micro, small and medium-sized units in availing their rights through trade remedy measures under the WTO framework. Additional ports/locations would be enabled on electronic data interchange over the next few years. An inter-ministerial committee has been set up to serve as a single window mechanism for resolution of trade related grievances. An updated compilation of standard input and output norms and iTC (HS) classification of export and import is being published after five years, which will bring greater transparency and facilitate easy transaction by exporters and importers.#