Egged on by the Centre to participate actively in boosting country’s exports, 14 states including Madhya Pradesh, Gujarat, and Jharkhand have sent their export strategies to the Centre, identifying the potential products for exports, potential markets, and their global competitors among others.
Official sources told The Indian Express that some of the states have also prepared the blueprint for infrastructure projects which need to be ramped up for boosting exports. The development comes amid exports contracting by around 14 per cent in April on the back of decline in global demand and softening prices of crude, metal and commodities. As the government targets to double the export of both goods and services to $900 billion by 2020, the outbound shipment for April stood at $22.05 billion compared to $25.63 billion during the same period in 2014-15.
“The commerce and industry minister will take up the issue with all chief ministers while the commerce secretary will write to chief secretaries of all states to ensure adequate allocation of funds for building export infrastructure in view of the increased allocation in recent Budget. The states have identified the products, possible markets, technical standards they have to conform too in the international market, their competition in the relevant product and the branding strategies,” the official said.
States need to improve road connectivity to ports, rail, and airports, ensure faster movement of rakes by railways and quicker air cargo movement while building on supportive infrastructure like laboratories for testing, more tool rooms and plant quarantine facilities, larger trade facilitation centres and land customs stations to contribute to exports’ growth.
The commerce ministry has allocated Rs 250 crore for giving support to states for building export infrastructure apart from the Rs 50 crore allocated in the Budget 2015-16 under the scheme for Central Assistance to the States for Developing Export Infrastructure and other Allied Activities (ASIDE) , brought down from Rs 110 crore in 2014-15 and Rs 737 crore in 2013-14. The dramatic cut in ASIDE is on account of greater devolution of tax revenue from 30 per cent to 42 per cent to the states on the basis of the 14th finance commission recommendation.
“The ASIDE is also being restructured and renamed. Going forward, the revamped scheme will only support infrastructure gaps in central institutions and the states will have to fund the state component in the infrastructure projects from the additional allocation,” the official said.
Ajay Sahai, director general, FIEO, said that the Centre’s move is in right direction as all the important sectors of production are with states and “the impression that exports are revenue loss for them needs to change.”