New Delhi: Creating jobs is expected to be the focus of the country's foreign trade policy since buoyant exports over the past two years have provided a big comfort factor to policy-makers. The forthcoming annual supplement to the long-term trade policy to be announced on April 7 is expected to highlight ways to enhance exports in areas where large swathes of employment can be generated. This will be mainly in the small and medium sectors, which have always in the past been big contributors to export growth.

Official sources say an effort may be made to bring about a quantum leap in exports in areas where growth has actually been at ground zero till now, as well as areas such as textiles which have always loomed large in the export basket. Commerce Minister Kamal Nath has already indicated that focus areas would include toys, leather, gems and jewellery, sports goods, stationery and processed foods.

Rise in exports

The annual supplement to the policy will be unveiled in the backdrop of exports having risen by roughly 20 per cent for the last two years. This steep increase in export growth is attributed to several factors including improvement in the external economic climate leading to higher demand as well as improved competitiveness of the Indian industry. In any case, it has given greater flexibility to policy-makers who are now honing in on the need to generate employment by giving a boost to the small and medium sectors of the economy.

Simultaneously, the policy will move further in the direction of simplifying procedures and evolving more effective incentives for exporters. The popular duty entitlement passbook scheme (DEPB) has already been extended for yet another year while the Government tries to formulate another scheme that may be considered more in line with rules of the World Trade Organisation (WTO). Another incentive scheme is also been finalised to replace the Target Plus scheme scrapped in last year's supplement to the policy. This is expected to aim at specific products and markets to accelerate export growth.

In addition, sources said steps would be taken to enlarge the scope of the Vishesh Krishi Upaj Yojna. The Commerce Minister has already given an assurance to the Board of Trade that Government will try to neutralise the incidence of service tax on export industries.

Simplifying procedures

As for other proposals of the Board headed by Kumaramangalam Birla, discussions are under way with the Finance Ministry to seek neutralisation of taxes and levies on exports.

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