Rs 625-cr stimulus unveiled for select exports

February exports up 35% but cumulative figures show decline.

The government has announced incentives worth Rs 625 crore for certain sectors of exports such as ready-made garments, engineering, electronics and agro products as they continue to face demand slowdown in international markets. These incentives would be effective from April 1.

While exports have started showing a positive trend on a monthly basis, cumulative exports continue to face the heat. In February 2010, exports were up 34.8 per cent at $16.09 billion from $11.94 billion in the same month last year. However, total exports during April-February 2009-10 declined 11.3 per cent to $153 billion from $172 billion last financial year.

“The incentives have been announced keeping in mind that certain sectors continue to face decline… Exports are expected to grow 15-20 per cent in 2010-11,” Commerce and Industry Minister Anand Sharma said today.

According to sources, the incentives would be distributed from the ministry’s internal budget. The incentives for export of readymade garments would be given out only for the US and the EU as they constitute 75 per cent of the country’s apparel exports. Those exporters would be entitled to the incentives for 300 items. This would be effective till September 2010.

Sops for 128 electronic goods, 34 engineering goods and 39 agro-chemicals and pesticides meant for 15 countries would be given for the entire 2010-11, under the Market Linked Focus Product (MLFP) scheme.

Apparel exports declined 14 per cent to $862 million in January 2010. During April-January 2009-10, garments exports reached $7.91 billion, down 10.16 per cent compared to $8.81 billion in the same period previous fiscal, according to the Apparel Export Promotion Council (AEPC).

Imports, on the other hand, surged a whopping 66.4 per cent at $25.06 billion in February 2010 from $15.08 billion in the same month last year. Cumulative imports during April-February 2009-10 declined to $248 billion from $287 billion, Director General of Foreign Trade R S Gujral said.

While some of the sectors such as tea, coffee, spices, man-made yarn, fabrics, plastics and linoleum continue to rise, jute, handicraft, leather, electronic goods, oilmeals and carpets continue to decline due to lack of demand in the traditional markets of US, EU and Japan.

Gujral added that export for the entire 2009-10 is likely to touch $168-$170 billion from $180 billion in 2008-09. The official trade figures for March and entire 2009-2010 would be released in May.

According to A. Sakthivel, president, Federation of India Export Organisations (FIEO), the incentives announced under MLFP scheme are expected to help exporters significantly, particularly in the backdrop of appreciation of rupee against the dollar and euro. He has also demanded a stable exchange rate that would induce export competitiveness similar to China and Bangladesh.