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Government plans package to boost exports

India, hit by a slump in exports on the back of a global economic slowdown, will announce a package of measures this week to boost its trade performance, a senior commerce ministry official said on Thursday.

"We're working on an intervention, within this week we should be coming out with that package," foreign trade director general N L Lakhanpal said without elaborating.

Earlier this month, figures released showed a 2.3 per cent fall in exports in the five months to August and analysts say that a pickup is unlikely after the deadly attacks on the United States, the country's second-largest trading partner.

Lakhanpal told an exporters' meeting in the southern city of Bangalore that exports had grown in terms of quantity and rupee value, but had shown a slump in dollar terms on account of a decline in the exchange rate for the rupee this year.

"There's nothing to be alarmed about but there's every reason to worry about (the fall in exports)," he said.

The office of the Director-General of Foreign Trade in the Commerce Ministry administers a maze of procedures and regulations, which can help cut red tape or cheapen import of raw materials or equipment used by exporters.

Lakhanpal cited the example of a one percentage point cut in the rate of export credit last month as a signal of the government's commitment to exporters.

Banks can now charge a maximum rate 2.5 percentage points below the prime lending rate for pre-shipment credit up to 180 days, as against 1.5 percentage point below the prime rate earlier.

The official said the government was working on more ambitious plans like the setting up of special export zones but cautioned that these could take time. Every SEZ involved an investment in excess of $2.0 billion, he said.

India's exports in April-August fell to $17.13 billion from $17.53 billion a year ago while trade deficit widened to $4.6 billion from $3.68 billion over the same period.

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