The Government’s recent 45,000 crore package for export promotion is a tremendous effort to facilitate the Indian export sector that is combating unprecedented geopolitical shocks. Notably, the package includes a 25,000 crore export promotion mission that is composed of a few existing schemes to ensure that the country can tackle global trade challenges swiftly and respond to the evolving exporters’ needs. Interestingly, it emphasizes better access to trade finance for smaller enterprises, enhanced market access, and visibility for Indian products.
In addition, the scheme seeks to boost exports from non-traditional districts and sectors, integrating existing export support measures like the Equalisation scheme and the market access initiative to align them with contemporary requirements.
Export promotion mission proposed in the Budget remains unlaunched
Interestingly, the other side of the package is the Credit Guarantee Scheme for Exporters that will offer government cover to exporters, allowing their access to 20,000 crore of additional credit. These two initiatives, with the recent extension of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, partially safeguard exports from multiple obstacles. However, this is possible when it is implemented timely. The export promotion mission announced in the Union Budget to last six years up to 2030-31, is yet to be launched eight months into the current financial year. The core objective is encouraging exports from non-traditional districts is ambitious; however, worth pursuing to expand the export base and benefit newer districts. Additionally, it could be a logical extension of the ‘One district, One Product’ scheme.
Experts raised questions regarding the Fund allocation
The praiseworthy larger goal is allowing smaller exporters’ easier access to credit- which should give this hard hit, crucial segment a fresh lease of life. The schemes for credit guarantee and interest equalization meet the needs of the moment.
Apparently, the experts have raised questions about the sufficiency of the funds allocated. The amount of 25,000 crore for 6 years – amounting to an annual allocation of a bit over 4,000 crore-may not be enough. Concludingly, the mission has begun, but its success will depend on how it hits the ground.
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