Indian government announces special plan to increase garment exports

The Indian government announced a new plan called the Special Attention Market Plan (SFMS) aimed at maintaining the momentum of foreign trade growth and increasing garment exports.

In announcing the 2009-14 foreign trade policy annual supplement, Minister of Commerce and Industry Anand Charr said that the government will provide exporters with 4% duty credit under the new SFMS.

The SFMS aims to increase India’s export competitiveness to 41 countries, including 12 Latin American countries, 22 African countries and 7 CIS countries. Exports to these countries, in addition to the already provided 3% tariff credit, will also be eligible for a further 1% increase in tariff credits, with total tariff credits reaching 4%.

For the apparel industry, SFMS includes all of the products under sections 61 and 62 of the Harmonized Tariff Schedule (Apparel and Accessories, Knitted or Crocheted Products) in the United States. Tariff credit is valid from April 1, 2011 to March 31, 2012, which is 2% of FOB export value.

The plan will increase the Rupee credit interest subsidy by 2% for hand-loom looms, handicrafts and carpet exporters. The Reserve Bank of India has announced this on October 11. It is estimated that it will consume about 8 to 9 billion rupees from the national treasury.

The combination of these preferential measures may help exporters withstand the sluggishness of the major traditional markets, such as the United States and Europe, which will consume 1.7 billion rupees from the treasury.

Mr. Anand Sharma also stated that the Indian government will soon sign a broad trade and investment agreement with the European Union. He disclosed that the government is negotiating similar agreements with several countries on different continents to promote trade.

In the first six months of this fiscal year, India’s exports increased by 52.1% to US$160 billion. The Central Government hopes that exports for the current fiscal year will reach a target of US$300 billion.

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