Hegde will announce the export-import policy for 1999/2000 (April-March) on Wednesday. The country's exports have been performing dismally and exporters have complained of excessive red tape.

Merchandise exports fell by 1.98 per cent to $27.16 billion in April 1998-January 1999 from the same period a year earlier. However, exports in January alone rose to $2.85 billion from $2.63 billion in the same month of 1998.

"The fall in exports during 1998/99 is because of a global slowdown and devaluation of currencies by many of the Southeast Asian nations," Federation of Indian Exporters Organisation (FIEO) president Navratan Samdria told Reuters. Samdria said the situation had improved in the past couple of months.

Commerce ministry officials said the new policy is likely tofocus on sectors like gems and jewelleries, pharmaceuticals, software and electronics.

The Government is expected to shift about 400-500 items under open general licence from the current restricted or negative list of imports to align its policy with World Trade Organisation (WTO) rules.

The expected lower cost of imports should give Indian manufacturers and exporters a shot in the arm, ultimately making the cost of Indian exports more competitive on global markets.

Exporters said the Government should allow imports of gold and silver under the special import licence (SIL), which allows the goods to be freely transferable.

The SIL is an incentive for exporters to import goods on the restricted list, subject to payment of actual import tariffs. "Inclusion of gold and silver in SIL will improve the premium on it," said an economist with a Mumbai-based foreign brokerage.

Samdria said that apart from changes in import policy, the Government must take steps to usher in transparency in procedures andreduce delays in clearances of goods at ports.

This will help in reducing transaction costs and increase operational efficiency, exporters said. Hegde has said that Indian states would be roped in to frame exporter-friendly policies.

"The stress should be on small-scale exporters. They are the backbone of our exports and employment generation," FIEO's Samdria said.

He said the Government must also provide incentives for buying agents, who form a crucial link in exports of traditional items like handicrafts, gems and jewelleries.

The new trade policy is expected to boost exports of services like software professionals, tourism and other high value-added services where India has a comparative advantage.

Samdria said the Government must frame a comprehensive policy for export of low-cost manpower. "We have a natural advantage in export of labour and the Government should take the issue of easing restriction on it at the WTO," he said.