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Commerce minister Anand Sharma with industrialists at the Board of Trade meeting in New Delhi on Friday. (PTI)
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New Delhi, March 22: The government is likely to offer short-term incentives, simplify procedures and reduce transaction costs to boost exports, which are likely to fall short of the target this fiscal and further widen the trade deficit.
“We are looking at the number (exports) and what is very disturbing and challenging is that we have not even reached where we were before (in the last fiscal) at $306 billion,” commerce minister Anand Sharma, who chaired the Board of Trade (BoT) meeting today, said. He added that the trade deficit was likely to widen to $193-196 billion this fiscal.
The BoT has representation from business associations and trade bodies such as the Engineering Export Promotion Council and the Federation of Indian Export Organisations (Fieo).
Representatives from the ministries of finance, external affairs and micro and small and medium enterprises attended the meeting. It will give suggestions for the annual supplement to the foreign trade policy (2009-2014) to be unveiled in the first week of April.
Fieo president Rafeeque Ahmed said, “As we are much away from our targets fixed for 2012-13, we need to revisit our strategy for imparting competitiveness to exports while simultaneously pursuing aggressive marketing to realise better exports in 2013-14.”
Sharma said, “Interest subvention was being provided to all SMEs and a substantial part of engineering has got the benefit. We are seriously considering how to strengthen it. I hope on dollar credit, we will be able to make some progress in disbursement.”
He added that the downturn and limited availability of resources had made it difficult for the government to offer stimulus packages. “So, we have to think of some new ways, how to enhance productivity, how to remain competitive, and also to ensure that our presence grows.”
CII president Adi Godrej pressed for the reduction in credit cost. “The cost of export credit is in the range of 11-12 per cent, which is much higher than competing countries in Southeast Asia, where it is around 5-6 per cent,” he said.
The foreign trade policy will focus on sectors that constitute the bulk of shipments such as engineering, gems and jewellery, textiles and leather.
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