The amended Export-Import policy for 1997-2002 surprises pleasantly in combining a sharp focus on exports with some courage on imports, and an admirable sense of proportion about what such a policy can and cannot achieve. Commerce Minister Ramakrishna Hegde declared, ``I have elaborated my views about the essential ingredients for export growth in detail not as an alibi for the poor export performance but to make the point that the Exim policy by itself cannot achieve a very high export growth rate. Basic structural changes are essential to bring about and ensure sustained growth in exports.'' Quite right. Within those constraints, the commerce ministry appears to have done a competent job to make exporters' lives easier in many ways, adopting a forward-looking approach to trade in at least two respects, and even some willingness to take political risks on imports.The policy's thrust is to come to exporters' aid, whether it is by raising credit availability or lowering the entitlement threshold in exportpromotion schemes, raising the premium on special import licences or getting out of their hair by reducing ``interface'' between them and the Directorate General of Foreign Trade. The ``forward-looking approach'' refers to a kicking off of electronic applications by exporters to the ministry, marking a beginning in much-vaunted E-Commerce as the business medium of the future. And in allowing service exports the same export incentives as other exports at a third of the latter's value, acknowledgment is finally forthcoming of the enormous potential of this sector and India's comparative advantage in it. Hegde seems to have got his way in some of his arguments with Finance Minister Yashwant Sinha who is prompted by revenue considerations. While undue cosseting of exporters is not justified in the long run, the dismal export scenario probably does call for some extreme steps just at present.The biggest surprise, perhaps, is the decision to phase out more than twice as many quantitative restrictions on importsas India had been required to do by 2000 as part of its WTO commitments. Nearly 900 items have been added to the list that can be freely imported on payment of customs duty. Another previously restricted 414 can now be imported with a special licence. It has not been an Indian tradition to allow liberalisation that it was not committed to by contract. And yet, while it need have phased out import curbs on only about 400 items at this time, the ministry opted for more than twice that number. This is a victory for those who argue against the fear of opening up, yes. But it also follows from recent experience. In the hundreds of imports on which quantitative restrictions were removed last year, imports of over Rs 1 crore occurred in just a single item - sugar. That has soothed fears of a flood of imports once physical restrictions on them are removed. There are other reasons. India's dispute with the US on phasing out its import curbs is not yet over, though the WTO in an interim ruling has asked the twocountries to settle the phaseout schedule bilaterally. Premature but voluntary early phaseout may be politically preferable to direct arm-twisting by Washington. The bottom line is that for once India has effected voluntary liberalisation, even though its practical result may be modest. Good for it.
