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Medium-term plan sees 3-fold hike in exports
Our Economic Bureau
New Delhi, Jan 2: The commerce ministry on Friday unveiled a medium-term strategy to achieve an export level of $90 billion and a 1 per cent share for India in world exports by 2002.The target is nearly a three-fold increase over the level of $33 billion achieved in 1996-97. India's share in world exports now hovers around 0.6 per cent. For achieving the target, the strategy envisages improving the competitiveness of exports, enhancing the production base for exports in line with trends in world trade and focussing on technology upgradation. A commerce ministry release says the strategy is also addressing infrastructural bottlenecks and strengthening the institutional infrastructure available for export production and marketing. Also included are the formulation of a trial scheme to facilitate export-linked foreign direct investment in the electronics sector and continuing and improving export processing zones, export-oriented units and EPCG schemes, helping enhancement of the production base through
export-linked foreign direct investment and state government' s involvement in exports. A "comprehensive" plan is also on the anvil to make EPZs free from procedural and customs constraints to make their functioning truly attractive. The strategy envisages the use of FDI as an instrument for ensuring adequate production base in such items for which there is world demand by considering special schemes to attract investment in such areas. The strategy recognises that availability of infrastructural is crucial for the development of exports and that the mis-match between availability of infrastructural facilities vis-a-vis export growth in recent years has resulted in bottlenecks due to delay at ports, shortage of air cargo capacities and road congestion. The strategy emphasises efforts at improving productivity in ports, use of information technology and modernisation of customs clearance mechanism, reduction in cost of containerisation and development of intermediate and minor ports in select locations
already identified. Air cargo facilities are proposed to be upgraded and efforts would also be made to introduce a green card system for loaded trucks and containers to move without checking en-route and subject to the verification of destinations. Other issues impinging on export competitiveness include the cost of export credit, risk cover and guarantee etc. Hence the strategy also envisages continued efforts to reduce cost and availability of export credit through RBI and the commercial banks in order to achieve speeding up of the credit risk assessment process in a time-bound manner, operationalising electronic fund transfer system, increase in share of net bank credit flowing to the export sector etc. Sectorally, the strategy seeks to achieve the twin objectives of widening exports of existing products to existing as well as new markets and diversifying the export basket in line with trends in world exports. The items covered sectorally include gems and jewellery, electronic hardware and computer
software, textiles, engineering goods, chemicals and allied products, agricultural products, leather and leather products, marine products, sports goods, ores and minerals and plantation items like tea and coffee. The directional strategy focuses on widening trade with all countries including the emerging markets with special emphasis on market promotion through information dissemination, sponsoring of business delegations, buyer-seller meets, participation in trade fairs etc. Specifically, emphasis will be on setting up of warehouses at crucial points in the region to facilitate stock and sale for exports. Apart from North America and European Union, strengthening of trade with Asia is an important link in the strategy besides conclusion of negotiations with SAARC to complete SAFTA and widening and deepening of trade with Latin America with special promotional support and incentives has already been drawn up. There is a need for a long-term policy to promote agro-exports, bearing in mind that in the
post-Uruguay Round trading environment, India's potential for export growth in this sector is high compared to other sectors. This is particularly true of products in consumer packs since value addition of such exports is substantial. Some of the elements of the strategy addressing its basic objectives have already been implemented and realised due to several initiatives taken in recent months. These include identifying and setting up of task forces for thrust items in the electronics and engineering sectors, a complete change in the procedures relating to import and export of certain selected sectors with high export potential etc. The other measures taken are a special scheme to dispense with the demand of central excise duty in advance and claiming reimbursement at least in certain categories of deemed export, scheme for facilitating project exports and simplified procedure for purchase of goods and major overseas buying arrangements and a phased reduction in the interest on pre-shipment credit, removal
of the penal rate of interest on post-shipment credit and introduction of FCNR scheme to provide export credit at LIBOR plus interest rate.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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