New funding for exporters unlikely in revised FTP

Still stymied by the struggling trade markets in the developed world,exporters hoping for financial support to salvage their fiscals are unlikely to find relief....

Written by KARTIKAY MEHROTRA | New Delhi | Published:August 20, 2010 1:47 am

Still stymied by the struggling trade markets in the developed world,exporters hoping for financial support to salvage their fiscals are unlikely to find relief when the Commerce Ministry announces its revised Foreign Trade Policy (FTP) on Monday. Through multiple sectoral reviews dating back to January,the director-general for foreign trade is well aware that textiles,man-made fibres,tea and electronic goods are struggling to stay afloat. However,without new subsidy money from North Block,the likelihood of fresh funding seems unlikely,said ministry sources.

“Sectors still in the hole could see some new money but it will be marginal at best; not enough to carry them through the year,” said a Ministry official under condition of anonymity. Officials declined to detail how much money might find its way to those industries. “We are running a tight ship here in commerce,” he said. Last year Commerce Minister Anand Sharma provided Rs 1,350 crores across sectors to help them recover from economic doldrums. This year he had written to the Finance Ministry requesting the same support but has yet to receive further directions to spur the sops.

The incentives were across a wide array of sectors ranging from garments and textiles to information technology. “Since the last policy announcement (on 27 August 2009) several sectors have shown signs of a revival. The exporters have done very well over the last six months,” the source added. Commerce Ministry officials said that the Finance Ministry has delayed the releasing of money for export sops while evaluating the Ministry’s sectoral reviews first-hand. The government may announce an extension of the Duty Entitlement Passbook (DEPB) scheme that expires in December 2010. “We will take a call on the existing DEPB schemes. A time extension is possible,” the source said. He added that the government is also likely to allow free import of key inputs for exporters of gems & jewelry.

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