India Govt. unveils new foreign trade policy to boost exports, greeted with mixed response

"My immediate priority is to arrest and reverse the declining trend in exports. We have tried to boost exports through all possible measures. The focus is on labor-intensive sectors. The safeguards were necessary in the hard hit domestic industry," said Commerce Minister Anand Sharma, adding that labor-intensive sectors such as handloom and handicrafts, leather, gem and jewellery sectors will be the beneficiaries of the new foreign trade policy.

"Considering the fact that there is a contraction worldwide, demand has fallen especially in the traditional markets of Indian exports like Europe and America. That's why we have announced a very ambitious expansion and diversification by including 39 new markets. We hope that these 39 markets will offer the potential and our exporters now will have new motivation to reach out," Sharma said. The US and Europe account for a large part of India's goods exports, worth $169 billion in 2008-09. As per April-December 2008 data, the US had a 12.8 percent share in India's exports while the 27-member EU countries had 22 percent. Exports to both the markets have declined substantially after the financial crisis broke out in October 2008.

Sharma also said that the government is determined to reduce transaction costs for Indian exporters. "The current policy has already reduced the application fees for exporters and the government will work to simplify export policies and procedures. Electronic trade is important and will be looked at in a time bound manner," the minister added.

In the long-term, Sharma said the government aims to instil confidence in the exporters by assuring them of government support, incentives and policy initiatives. These steps will be "conducive in boosting the confidence and to make Indian exports globally competitive," the minister said.

"We would like to achieve annual export growth of 15 percent over 2010-11 with an annual export target of $200 billion by March 2011," Sharma said. "In the remaining three years of this foreign trade policy up to 2014, the country should be able to come back on the high export growth path of around 25 percent per annum."

According to the minister, the government has set a target of doubling export in terms of volume and value by 2014. "By 2014, we expect to double India's exports of goods and services. We hope to double by 2014. 2020 is to double India's share in percentage terms. It's a modest target. We did not want to make tall claims in the policy and not deliver. We decided to be conservative with the policy because of the global slowdown," Sharma said. India had a 1.64 percent share in global trade in 2008.