Commerce Secretary Rajeev Kher said several developed countries are raising issues against many of India's export promotion schemes. (Agencies)
"We will have to re-engineer (the schemes) in a manner that they conform to international laws to which we are parties," he told the CII's Export Summit.
He said the WTO Agreement on Subsidies and Countervailing Measures (ASCM) allows India (which is an Annex VII country) to provide export subsidies as its per capita GDP on nominal terms (on 1990 prices) is still within USD 1,000.
But, Kher added, "surely we would have or very soon we will cross this bridge and then we will not have the protection of Annex VII countries which would mean that all export subsidies will be prohibited".
"This means that that we will have to re-structure or re-engineer our various schemes in a manner" that they sustain for a long term, the Secretary added.
Further, he said that under WTO's ASCM, Indian exporters would also have to face challenge of subsidies.
India cannot provide export subsidies to a sector if outbound shipments from that particular segment crosses 3.5 per cent share in the relevant global market.
Citing example of textiles, he said the sector is "reported" to have crossed the 3.5 per cent share in the global market on a certain point of time and now India would not be able to provide export subsidies to the sector.
"The textiles sector has gone into the area of being competitive as defined by the WTO's ASCM law. Therefore, textiles sector is not now eligible for export subsidies. Now this is what we have to recognise. Sooner than later, new programmes and new schemes will also reach that stage," he said.
Kher said that exporters need to recognise that export subsidies are something which can take them to only a point and beyond that "it is the inherent competitiveness and rest of the reforms agenda which will help us".
The government provide export benefits to sectors under programmes such as Focus Market Scheme, Focus product Scheme and Duty Entitlement Pass Book (DEPB).
Commerce Secretary Rajeev Kher said several developed countries are raising issues against many of India's export promotion schemes.