New Delhi: Industry on Wednesday said export incentives announced by the government will not only boost outward shipments but would also help reduce the widening trade deficit.
Exporters body Federation of Indian Export Organisations (FIEO) said the extension of interest subvention scheme for one more year much before its expiry shows the pro-active approach of government which will provide stability.
"The interest subvention extended to certain sub-segments of engineering sector would add to the competitiveness of engineering exports," FIEO President M Rafeeque Ahmed said.
Sharing similar views, Engineering Export Promotion Council Chairman Aman Chadha said reduction in cost of credit will enthuse engineering exporters to be more aggressive in their export strategy.
The two percent interest subsidy scheme, which was to end on March 2013, has been extended for one more year. Besides, more sectors have been covered under it with the engineering exporters being the major beneficiaries.
Industry body Ficci said the set of export sops will be critical in arresting the recent declining trend in our exports.
"Extension of interest subvention scheme for the existing sectors up to end-March 2014 would significantly help exports of a number of labour-intensive products and SMEs," Ficci Secretary General Didar Singh said.
Exporters have been facing a demand slowdown in the US and European markets. During April-November 2012, India's exports contracted by 5.95 percent to USD 189.2 billion. Merchandise exports are in negative zone since May this year. Due to decline in exports, trade deficit touched USD 175.5 billion in January-November.
However, FIEO exuded confidence that the country's exports could reach USD 400 billion by 2013-14, despite emerging challenges.
On the extension of markets for Market-Linked Focused Product Scheme and Special Focus Market Scheme, Apparel Export Promotion Council Chairman A Sakthivel said : "This will help in boosting the exports to non-traditional markets and help in product diversification drive."
As part of the incentive package, government announced introduction of a pilot scheme of 2 percent interest subvention for project exports through EXIM Bank for countries of Saarc region, Africa and Myanmar Industry chamber CII said, "South Asia region is fast becoming the world's economic centre of gravity. Though India's trade with South Asian countries has increased encouragingly, trade is yet below the potential."


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