India Announces Stimulus Program for Exports

Aug. 23, 2010
Measures include tax breaks, subsidized loans and help for upgrading machinery equipment.

India will provide $225 million work of stimulus funds to help garment, leather and handicraft exporters during the "fragile" global economic recovery, the government announced on August 23.

The country's export growth slowed sharply in July on weakening demand from Western markets and the government has warned that the pace could slacken further as the global recovery stumbles.

"We are not yet out of the woods," Trade Minister Anand Sharma said as he extended tax breaks for exporters, subsidized loans, help for upgrading machinery equipment and other concessions in India's annual trade policy.

Sharma said he wanted to help India's textile, handicrafts, leather and other labour-intensive sectors get through the "fragile (global) recovery and the prevailing uncertainties."

But Sharma reiterated that India was still on track to meet its overseas sales target of $200 billion for the fiscal year to March 2011.

The countrys merchandise exports last year fell 4.7% to $176.5 billion as appetite for made-in-India goods shrank sharply.

Unlike China, where overseas sales have been a main growth driver over the past three decades, exports account for just 15% of gross domestic product in India's still relatively inward-looking economy.

Sharma also said the country remained committed to the successful completion of the nearly decade-old Doha round of World Trade Organization free trade negotiations.

At the same time, India is also holding talks for trade agreements with Malaysia, Japan, the European Union and the Association of Southeast Asian Nations , Sharma added.

Copyright Agence France-Presse, 2010

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