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India proposes to implement new export stimulus policies
According to recent reports from Indian media, the Indian government is considering introducing new export incentive policies to support key sectors such as leather goods, handicrafts, carpets, and certain engineering equipment. This move comes as a response to the declining demand in key markets like Europe and the United States. The previous export incentive scheme, introduced during the 2008 financial crisis, expired on March 31, 2010, leaving many exporters without support.
On August 23, Commerce and Industry Minister Sharma Mu officially announced the new export policy during the annual review of India's foreign trade strategy. Under this policy, exporters will be eligible for tax-exempt certificates covering 2% of the value of specific goods exported to designated regions. This initiative aims to boost competitiveness and encourage more businesses to engage in international trade.
However, the textile sector—India’s largest export industry—has not yet been included in the new policy. The government is still evaluating whether it should extend the benefits to this crucial sector. Meanwhile, the new export incentives are expected to streamline the export process, allowing more businesses to adopt "self-certification." Currently, only large-scale exporters in select industries can use this system, which allows them to verify their goods without needing customs inspections.
According to a report by the Indian Export Federation, trade-related costs account for approximately 7% of the total expenses faced by exporters. By simplifying procedures and reducing these costs, the government estimates that the new policy could generate an additional $5 billion in revenue for the export sector.
Despite these efforts, India's exports saw a significant increase of 32% year-on-year in the first fiscal year of 2010, reaching $50.7 billion. However, certain sectors like handicrafts, leather products, and carpets have continued to experience slow growth, highlighting the need for targeted support and further policy refinement. With the introduction of these new measures, the government hopes to reinvigorate export performance across multiple industries.