BONUS POINT

New Delhi, April 1: The government today announced fresh incentives for exporters, made more sweeter by data that showed robust export growth of 35.25 per cent in February despite the rupee strengthening against the dollar.

The government extended the refund of service tax paid by exporters to three more areas, taking the number of such services to 13.

The three new beneficiaries of service tax refund are: custom house agent; banks and other financial entities in relation to the collection of export bills and the export letters of credit, and business auxiliary service provided by a commission agent located outside India.

According to trade data, exports grew 35.3 per cent in February to $14.24 billion. Trade analysts said some amount of recovery after the sluggish growth in the past few months indicated that the government's support to exporters was paying off.

The rupee had appreciated by more than 8 per cent against the dollar during 2007-08, hitting exporters hard.

For the April-February period in 2007-08, exports grew 22.9 per cent to $138.42 billion. However, the government is unlikely to meet the annual export target of $160 billion.

Imports in February went up 30.53 per cent to $18.46 billion. Cumulative imports for the April-February period were $210.89 billion, showing growth of 30.21 per cent.

The 11-month trade deficit stood at $72.46 billion against $49.32 billion a year-ago.

Ganesh Kumar Gupta, president of the Federation of Indian Export Organisations, said the data showed the “resilience of exporters”. “However, the break-up of export figures needs to be seen to evaluate how the traditional and employment generating sectors have contributed to these exports,” he said.

Moody’s warning

Credit rating agency Moody’s said exporters would have a tougher year, as decelerating global demand, particularly from the US, India's largest export market, would temper outbound shipments.

The strong rupee will also weigh on India's export sector in 2008. The agency expects the rupee to continue to strengthen against most major currencies in the medium term, particularly against the dollar.