The Commerce Ministry has indicated that it would give more incentives to struggling export sectors such as textiles, readymade garments, leather and handicrafts.

At the same time, some sectors that are doing well on the export front including petroleum, engineering and chemicals may lose sops that they are getting at present, official sources told Business Line.

The Commerce and Industry Minister has also asked the Federation of Indian Export Organisations (the apex body for exporters) to undertake a study on the extent of export diversification to non-traditional markets due to incentives provided in the Focus Market Scheme and the Market-Linked Focus Product Scheme, the sources said.

Performance assessment

The Ministry is expected to announce the Foreign Trade Policy supplement in August by fine-tuning the incentives, they said. In this regard, the Commerce Industry Minister, Mr Anand Sharma, met FIEO officials on Wednesday to review the sector-wise performance of exports.

Mr A. Sakthivel, President, FIEO, said in a statement that the regular growth in exports over the past nine months till June 2010 was a clear indicator that recovery on the external front is gaining momentum due to the pick-up in global demand. He informed that sectors such as engineering, chemicals and oil and petroleum have shown an average growth of 42 per cent in the recent months.

FIEO's demands

The FIEO has sought the continuation of schemes such as Duty Drawback, Advance Authorisation, Duty Entitlement Passbook, DutyFree Import Authorisation and Export Promotion Capital Goods. However, the nature of exemption provided under these instruments will depend upon the Government's decision on exemption from Central Goods and Services Tax for inputs/capital goods required for exports, it said.

The FIEO also asked for capping export credit at the base rate so that exporters would be able to get the credit at about 8 per cent. To boost technological up-gradation, it wanted extension of zero-duty EPCG Scheme to all sectors.