Select export sectors may get more sops: Sharma

NEW DELHI: Exporters of engineering products and handicrafts may get more fiscal sops to help them tide over the demand crunch, Commerce and Industry Minister Anand Sharma said.

"We will have to tweak those sectors which have not recovered," Sharma told.

He said the Directorate General of Foreign Trade (DGFT) in his ministry would complete a performance review of different sectors in July.

Labour-oriented export sectors like handicraft, jute, engineering goods and electronics registered negative growth in March, despite the country's overall exports showing 54.1 percent expansion.

In a similar exercise in December, the government had provided some market- and product-linked incentives. For encouraging export diversification outside the western economies, the Commerce Ministry had extended incentives on shipments to 41 new markets.

The government intervened with a stimulus packages when exports plunged after October, 2008, under the impact of global financial woes.

"It was a tough call because last May, our exports were in deep red, -39.4 percent," Sharma said, adding that the export sector has seen a broadbased consolidation.

According to a senior Commerce Ministry official, incentives could be shuffled among different sectors. Those doing well like gems and jewellery may have to vacate some sops for the segments still in trouble.

In 2009-10, India's exports dipped by 4.7 percent to USD 176.5 billion from USD 185.29 in the previous fiscal.

Sharma, who is also in charge of the Industry Department, said consolidation has also taken place in the manufacturing sector.

The manufacturing sector, which saw growth dive to 3.3 percent in March, 2009, had peaked at 18.5 percent growth in December, 2009.

His ministry is working on a plan to give a fresh impetus to the sector. A concept paper on setting up National Manufacturing Investment Zones (NMIZs) has been placed in the public domain.

Some of the suggestions, like giving flexibility to units in NMIZs to downsize the workforce, are considered radical.

Sharma said, however, there would be provisions for social safety for the workers.