Export majors kept out of final focus market scheme

NEW DELHI: The controversial focus market scheme announced in this year’s foreign trade policy allowing fiscal incentives for exports to select markets has finally taken off.

Ministries of finance and commerce, which were at loggerheads over the revenue outgo the scheme would entail, have managed to arrive at a compromise on the scope of the scheme. It has been decided to keep big export markets like Brazil and South Africa out of its ambit and include only those Latin American and African countries - the two regions that the scheme targets - where India’s bilateral trade is below $200m.

Speaking to ET, officials said excluding big existing markets from the scheme would ensure the revenue outgo for the focus market scheme and the focus product scheme - notified earlier - would be limited to about Rs 600 crore. Had the entire Latin American and African region been included, as initially planned by the commerce ministry, the bill would have more than doubled.

According to the official notification, the focus market scheme would be extended for exports to a total of seven countries in Latin America and 49 in Africa. The countries listed include Argentina, Bolivia, Chile, Mauritius, Zimbabwe, Senegal and Botswana, among others.

The scheme designed to push exports in relatively unexplored markets offers a 2.5% export credit to exporters selling their goods to the identified markets. Officials said the notified list was final and no additions would be made. The commerce ministry’s initial plan of including certain Confederation of Independent States (CIS) countries has also been dropped.