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Anand Sharma discusses foreign trade policy with Pranab Mukherjee

A week ahead of the foreign trade policy, Commerce Minister Anand Sharma today held detailed discussions with Finance Minister Pranab Mukherjee on giving support to exporters in the wake of global demand slowdown.

"We had a detailed discussion on the foreign trade policy (FTP), which I would announce on June 5," Sharma told reporters here after the meeting.

Earlier, he had hinted at giving export incentives to some sectors to cushion them from the slowdown in Western markets in the forthcoming FTP.

Sharma has already discussed the problems of exporting community on May 17 and would hold another meeting with corporate honchos on June 1.

"A meeting of the Board of Trade will be convened on June 1. After the stock taking exercise is complete, the government will intervene in sectors which require support," he had said.

In April, exports of gems and jewellery and readymade garments contracted by 25.7 per cent and 9.7 per cent to USD 2.6 billion and USD 1 billion, respectively.

In the last FTP announced in October 2011, the government had extended export incentives worth Rs 1,700 crore.

The economic crisis in the US and Europe is hitting India's exports. Both these markets account for about one- third of country's total shipments.

The expansion in the country's merchandise exports, which grew by as much as 82 per cent in July 2011, came down to 3.2 per cent in April 2012 due to the demand slowdown in western markets.

"Slowdown in exports growth in April in the backdrop of economic crisis in eurozone is a worrisome development. There is a need to support exporters," Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said.

Sakthivel has asked the minister to give 2 per cent interest subsidy to the garment sector.

Apex exporters body FIEO has asked for further simplification of procedures to reduce transactions cost.

"Over the year the government has taken various initiatives to simplify and rationalise the procedural complexities in exports. But still, Indian exporters have to suffer transaction cost about 8 to 10 per cent of the value of exports," FIEO President Rafeeq Ahmed said.

Ahmed suggested various steps like exemption from terminal excise duty under deemed exports and EDI connectivity among all the 13 agencies involved in imports and exports.

"All these will help in reducing the transaction cost and time of exporters," he added.