Amid rupee's free fall and slowdown in western markets, the government is likely to announce incentives in the foreign trade policy (FTP), scheduled for June 5, to boost exports.
After taking stock of the country's exports with industry and export promotion councils, Commerce and Industry Minister Anand Sharma said before the announcement of FTP, issues affecting exporters such as rupee depreciation, cost of credit and eurozone crisis will be discussed with Finance Minister Pranab Mukherjee.
"...wait till June 5...the government will do everything that is feasible given the pressure of resources to keep India's exports momentum going...there are concerns, we have to take a balanced view we cannot have a situation where we end up paying higher imports bill and our exports do not grow," he said.
He said there is a need to focus more on labour-intensive sectors, "where the concerns have a clear social dimension on job creation".
He had recently hinted at giving export incentives to some sectors to cushion them from the slowdown in western markets.
In April, exports of gems and jewellery and readymade garments contracted by 25.7 per cent and 9.7 per cent to USD 2.6 billion and USD 1 billion respectively. In March, exports contracted by about 5.71 per cent year-on
year.
The economic crisis in the US and Europe is hitting India's exports. Both these markets account for about one-third of country's total shipments. The expansion in country's merchandise exports, which grew by as much as 82 per cent in July 2011, came down to 3.2 per cent in April 2012 due to the demand slowdown in the western markets.
The rupee has hit its record low level of Rs 54.60 against dollar in intra-day trade today. Due to this, global buyers have started putting pressure on Indian exporters to offer discounts on shipments.
"All these will be factored in, when we take view on FTP," he said adding "exports growth momentum should continue given the pressure on current account and trade deficits".
He also said that the government would continue its efforts to increase exports in new markets like Latin America and Africa.
In the last FTP, which was announced in October 2011, the government had extended export incentives worth Rs 1,700 crore (Rs 17 billion).
Chairman of Apparel Export Promotion Council A Sakthivel said that the government should look urgently on reduction of transactions cost and lower of inter st rates to boost exports.
Besides export promotion councils, representatives of CII and Ficci were also present in the meeting.
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After taking stock of the country's exports with industry and export promotion councils, Commerce and Industry Minister Anand Sharma said before the announcement of FTP, issues affecting exporters such as rupee depreciation, cost of credit and eurozone crisis will be discussed with Finance Minister Pranab Mukherjee.