Signals mixed on exporter sops

The department of commerce gave mixed signals about the possibility of further sops to exporters.

Anand Sharma, minister of commerce and industry, said the government has identified poorly performing segments within the export sector for further fiscal incentives while commerce secretary Rahul Khullar hypothesised about the possibility of the existing sops being withdrawn for healthier industries.

“We have identified some of the affected sectors and will recommend [to the ministry of finance] for some incentives,” Sharma said at a function to launch ‘Invest India’, a joint venture between the government of India and industry body Ficci.

The sops, contained in the foreign trade policy announced in August, included extension of income-tax holiday for exporters by one year, continuance of duty refund scheme till December 2010, a hike in the incentives available under the focus market scheme and inclusion of a number of engineering goods and electronic items in the scheme.

The scheme, announced three years ago, provides for government support in promoting exports of certain goods to certain markets identified for them.

Commerce secretary Rahul Khullar, however, hinted that the government may soon start looking at withdrawing some of the sops, particularly for the sectors that are back into the growth path.

Meanwhile, finance minister Pranab Mukherjee said the economic stimulus package is unlikely to be amended till the Budget in February.

“Some sectors have recovered over the period and fared pretty well in November. I think we could look at withdrawing the subsidies to some sectors,” Khullar said on Wednesday, giving details of the sector-wise performance of exports in November.

Exports grew 18.2% in November compared to the corresponding month last year.

However, for the current financial year, exports are down by 22%, at $104.2 billion.

Sectors which showed positive growth in November included petroleum products (83.6%), iron ore (47.2%), gems and jewellery (40.4%), marine products (27.3%), leather goods (16.2%) and spices (13.5%).