Does India need long-term foreign trade policy?

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New Delhi: With no clear signs of stability in the export sector, the government is in a dilemma whether to come out with a five-year Foreign Trade Policy or go in for short term measures to help the crisis ridden external trade sector.

"We are still thinking that whether we need to go for full five year FTP or not... we do not know what is going to happen in (external trade) in the next few months. We do not know what will happen by the end of the year," a senior government official said.

The Commerce Ministry is likely to unveil the FTP next month. The five-year Foreign Trade Policy (FTP) of the previous government ended in March, however, the provisions were extended till a new policy come into effect.

The FTP broadly spells out the priority segments in external trade and also gives incentives and disincentives depending on the country's need.

The extensions of sops like interest subsidy and an insurance cover till March 2010 in Budget indicates that it is not clear by when India's exports, which are on decline since October 2008, would revive, the official said.

Although Commerce Minister Anand Sharma is hoping for the crisis in exports sector to blow over, the officials are not sure whether a turnaround can be expected this year.