Relief Express to reach rupee-hit exporters

RUN-UP TO FOREIGN TRADE POLICY

The annual supplement to the Foreign Trade Policy, which will be released tomorrow by Commerce Minister Kamal Nath, is likely to announce a host of measures for exporters to help them tackle the appreciation in rupee against the dollar as well as to achieve an export target of $200 billion for 2008-09.

Significantly, this is the last year of the Foreign Trade Policy, which was introduced after the UPA government came into power in May 2004. The policy envisaged increasing annual exports to $200 billion in 2008-09 from $52.71 billion in 2002-03.

Sources said the new announcements are likely to include measures to boost exports of high value engineering goods and a set of schemes to support exports from traditional sectors like textiles, handicrafts and leather.

Moreover, coverage of existing schemes like Focus Product and Focus Market, which incentivise export of select products as well as exports to certain countries in Africa, Latin America and the Commonwealth of Independent States (CIS) nations, is likely to be increased. This would mean grater allocation for the schemes, which currently stands at Rs 1,000 crore.

To incentivise farm exports, more products from the sector are likely to be included in the Vishesh Krishi and Gram Udyog Yojana.

Policy measures to relax procedures for export and import of goods are also likely to be announced tomorrow.

Trade experts feel that in the last year of the Foreign Trade Policy, there is hardly any scope for major macro-economic measures. Till March 2008, the rupee appreciated against the dollar by nearly 8 per cent annually, as a result of which realisations of exports have come down. Annual exports in 2007-08 will miss the target of $160 billion, and are likely to be in the range of $150- 155 billion.

The exporters' community believes that even if an export target of $200 billion is achieved, the contribution of value-added products in the export basket will be low.

"Prices of gold, a key ingredient in gems and jewellery, have gone up.

Steel prices are also on the rise. Crude prices will certainly rise in this fiscal. Hence, even if the export target of $200 billion is achieved, it would be only on value terms and not on volume. This means, exports from employment intensive sectors will be lesser," said Ganesh Kumar Gupta, president of the Federation of Indian Export Organisations (FIEO).