New Delhi, Aug 11 :    New Delhi, Aug 11:  Indian exports are set to surge in coming months in tune with the uptrend in the domestic economy. The government?s assessment is that the spurt in exports and growth in the domestic economy are closely inter-linked. This pro-cyclical effect?the phenomenon of exports rising in tune with the growth in the domestic economy?is the fallout of the change in the system of export incentives. Under the new scheme of incentives wherein export profits are exempt from income tax, it is far more attractive for businessmen to export when the domestic profitability is high. Under this method, deemed export profit is worked out by multiplying the total profit of a company with the ratio of its export turnover to total turnover. Put differently, a part of the domestic profit is treated as export profit entitled to tax exemption. Export incentives do not turn out to be attractive if companies are not doing well in the domestic market. What is being witnessed now is the pro-cyclical effect with industrial uptrend and export growth occurring in tandem. In the last two years, export was a victim of what is called the anti-cyclical effect. It did not increase because the domestic economy was in the grip of a serious recession. This is a reversal of the trend seen till the early 90s, when export incentives comprised duty drawbacks, cash compensatory system (CCS) and replenishment licences. Duty draw back is still on; CCS has been done away with and replenishment licences have been replaced by a special import licence scheme. The government is convinced exports will rise without special efforts on its part. There is no need to engineer a rupee depreciation either. With the economies of east and south-east Asia recovering fast, India should be able to regain its market share in exports to these countries. On present reckoning, an export growth of 12-13 per cent looks eminently feasible this fiscal. Imports should be about 13-14 per cent. However, to achieve a 7 per cent gross domestic product growth, exports should register a 15 per cent growth. The government does not expect the trade gap to widen significantly this year. Last year, the trade deficit was $ 6 billion. This year, it may go up to $ 7 billion.