Structural reforms have increased the competitiveness of the Indian industry and this is reflected quite vividly in the robust merchandise export growth since 2002-03-exports have grown in term of US by more than 20 per cent per annum. The ongoing economic slowdown in the US is likely to have negative impact on the exports to other countries too. Combined with the high interest rates, there is significant risk of slowdown in the export growth. India’s foreign trade and policy has tried to consider all these conditions into account. It is evident that during the last four years, increased trade activity has created new jobs.

In order to achieve the export target, government announced innovative steps that included extension of Duty Entitlement Pass Book (DEPB) scheme till May 2009; extension of the interest subvention scheme where exporters are given bank credit at reduced rate of 6 per cent.
The Ministry also extended and interest subsidies to a spate income tax exemption to 100 per of export segments that are fully Export Oriented Units labor intensive in nature such as (EOUs). The benefit which was marine products, leather, textiles to end on March 31, 2009, will and handicrafts and 5 per cent now end on March 2010. Various additional duty credits for export organization, including of toys and sports goods. The annual supplement to the foreign trade policy-with an eye on the rising inflation-has banned cement exports. This could be followed by ban on export of primary steel. 

The policy has already withdrawn all the other benefits that were available to the steel products. It is expected that the above steps would improve the availability of steel and cement in the domestic market and it will automatically check on the rising prices of these commodity. But, the ban on export of cement is not likely to have any significant impact on the domestic prices. To discourage cement exports, the Government had recently withdrawn Duty Entitlement   Pass Book benefit on cement. Further, to curb inflation, Government has banned exports of non-basmati rice, edible oil and pulses.  Seeking to address surging inflation and sharp dollar depreciation amid the economic slowdown, the policy cuts down customs duty in capital goods from 5 per cent to 3 per cent, a move aimed at buoying the industry whose growth has slow down. Also all exports under the scheme will be eligible for incentives under the various promotional schemes.

For tapping new markets, 10 new countries have been included under the Focus Market Scheme, which fiscal sops to the exporters. These countries are Albania, Bosnia, Colombia, Croatia, Djibouti, Ghana, Honduras, Mongolia, Macedonia and Sudan. While exporters welcomed the expansion of the Focus Market Scheme, they lamented that key markets of Russia, Brazil and South Africa have been left out of the scheme. Under the Focus Product Scheme the Government aimed at giving a thrust to manufacture and export of certain products. However, the withdrawal of this benefit for steel products would have a limited impact on the sector. The withdrawal of the focus product scheme incentive would impact only some per cent exports.