Helping global recovery: Anand Shrama, India’s trade minister
INDIA offered a slew of export incentives yesterday in a bid to help garment, leather and other sectors weather a “fragile” global economic recovery.
The stimulus steps came after data showed India’s export growth had slowed sharply on weakening demand in Western markets and the government warned the pace could slacken further amid worries about the global upturn’s strength.
“We are not yet out of the woods,” trade minister Anand Sharma said as he announced a host of measures worth $225m (£146m), targeting mainly labour-intensive industries such as garments and handicrafts.
He prolonged an import tax rebate scheme, widened the availability of subsidised loans and announced duty-free imports of machinery equipment and other concessions in the government’s annual trade policy.
“There is still a shroud of uncertainty over the fragile nature of global economic recovery,” Sharma said
Sharma also said while plentiful monsoon rains had increased chances of a good harvest there was no plan to ease bans on exports of wheat and rice despite soaring grain stocks.
With annual food price inflation running at 10.35 per cent, the government must “pay close attention to domestic availability,” he said.
Sharma reiterated that India was still on track to meet its overseas sales target of $200bn (£130bn) for the fiscal year to March 2011.
The projection came despite figures showing merchandise exports growing at their slowest rate in six months with demand softening in two key markets - the US and the European Union.
India’s exports grew by 13.2 per cent to $16.24bn (£10.54bn) in July from a year earlier, down sharply from a breakneck pace of more than 30 per cent growth logged in April, May and June.
“It is reassuring to see the government has continued the incentives for struggling sectors, in particular, the labour-intensive sectors,” said Rajan Bharti Mittal, president of the Federation of Indian Chambers of Commerce and Industry or FICCI.
Sharma added that India was also facing intense export competition from developed countries seeking to boost their economies through sales overseas.
The minister also said India remained committed to successful completion of the nearly decade-old Doha round of World Trade Organization (WTO) free trade negotiations, but reiterated it must achieve its “development” goals.
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