We have diversified into 39 new markets

Written by fe Bureaus | Updated: Aug 28 2009, 05:31am hrs
Commerce minister Anand Sharma on Wednesday unveiled Foreign Trade Policy 2009-14, which seeks to promote productivity through better technology, newer markets and sops for hard-hit, labour-intensive sectors. In an interview with FE, Sharma said the policy aims to ensure continuity and stability in a challenging environment. Excerpts:

What is the crux of the FTP

Drafting the policy was challenging owing to the difficult global backdrop. I was mindful of the difficulties faced by the labour intensive sectors, the falling demand in traditional destinations, the shrinking of major economies and addressing these was a daunting task. At the same time, we had detailed consultations with stakeholders and took their concerns on board. The policy which we have given ensures continuity and stability. It will also upgrade technology and make Indian exports more competitive.

Will it help in restoring export growth

We have offered new incentives and increased the existing ones. Under the Focus Market Scheme, benefits have increased to 3%, in the market-linked Focus Product it has gone up to 2% and we will cover about 1600 products. We have also gone for ambitious market expansion and diversification by adding 39 markets. Major parts of Africa, Latin America and Caribbean are covered. We hope that with the support that the exporters will get, they can make up for the shortfall that they have suffered.

Isnt the target of doubling India s share in world trade by 2020 modest

We are being realistic, not modest. We hope the industry and exporters exceed our expectations.

Is there any contingency plan to deal with future shocks

We hope that there is a positive turnaround in major economies. We will be able to sustain the economic momentum in India and also continue to give support to the export sector. We have also given incentives to the farm sector. The tea sector has benefited in a big way. For the services sector, the SFIS (Served from India Scheme) we have doubled the entitlement, whether it is IT, hotel or tourism and are bound to benefit from it.

Since it is a five-year policy, does it take into account the proposed GST rollout from April 1, 2010

We are looking at cutting transaction costs and also at simplification, so that aspect has been addressed.

When do you expect export contraction to reverse

We expect to return to a high export-growth path of an annual 25% by 2014. We are continuing all the earlier concessions. The government will also take steps to reduce transaction costs for exporters.