India Government Announces Special Plan To Improve Clothing Exports

The government of India announced a new plan, the so-called special attention market plan (SFMS), which aims to maintain the momentum of foreign trade growth and improve clothing exports.

In announcing the annual supplement to the 2009-14 foreign trade policy, Anand Charles, Minister of Commerce and industry, said that the government would provide 4% of Customs credits to exporters under the new SFMS.

The goal of SFMS is to enhance India's export competitiveness to 41 countries, including 12 Latin American countries, 22 African countries and 7 CIS countries.

In addition to the 3% tariff credit already provided, the export of these countries will also be eligible for a further 1% increase in customs credit and a total tariff credit of 4%.

For the apparel industry, SFMS includes all products under the sixty-first and sixty-second chapters of the United Nations tariff table (clothing and accessories, knitted or crocheted products).

The effective period of Customs credit is from April 1, 2011 to March 31, 2012, which is 2% of FOB's export value.

The plan has added 2% rupee credit interest subsidy to Handlooms, handicrafts and carpet exporters. The Reserve Bank of India announced the news in October 11th.

It is expected to consume about 80-90 billion rupees of the Treasury.

These preferential measures may help exporters to withstand the recession of major traditional markets, such as the US and Europe, which will consume 17 billion rupees.

Mr. Anand Sharma also said that the India 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 160 billion US dollars. The central government hopes that the target of export in this fiscal year will reach US $300 billion.