Rs 1,700 cr Diwali gift for exporters

New Delhi: Government today announced a Rs 900-crore package for exporters giving a total Diwali bonanza of Rs 1,700 crore, as a pre-emptive move to cushion Indian exports from slowdown in western economies. The Reserve Bank has already notified interest subsidy of two per cent for handicrafts, handlooms, carpets and small and medium exporters.

The benefits will largely accrue to exporters of engineering goods, pharmaceuticals and chemicals. Those scouting for markets in Latin America, Africa and CIS (Commonwealth of Independent States) will be rewarded.

These measures have been incorporated in the annual supplement of the Foreign Trade Policy (2009-2014), released by Commerce and Industry Minister Anand Sharma. Commerce Secretary Rahul Kullar said, "In a ballpark range, excluding interest subvention, it will be around Rs 800-900 crore. For interest subvention it will be around Rs 800-Rs 1,000 crore…a total of about Rs 1,700 crore."

Fifty products in engineering, pharmaceuticals and chemicals would get special bonus of additional one per cent of export value between October and March this fiscal. Shipments to Latin America, Africa and CIS regions will also be eligible for additional one per cent duty credit besides three per cent already being given.

This is in sync with the export diversification strategy in the wake of demand sluggishness in the US and European markets. According to the latest IMF report, risk to Asian economies is "decidely" increasing because of European debt crisis and slowdown in American markets. "It is a Diwali bonanza. We were not expecting this much," President of the exporters` body FIEO Ramu S Deora said.