NEW DELHI: The Commerce Department is expected to push for higher interest subsidy and a wider export credit insurance as it seeks to make life easier for small exporters.
As part of review of the Foreign Trade Policy, the department is also seeking to widen services basket and make it more attractive for foreigners to study and receive medical treatment in India.
Commerce and Industry Minister Nirmala Sitharaman has already flagged the two areas - small exporters and services - for review of the Foreign Trade Policy, which is likely to be released next month, in time for the switchover to GST. Sources said the Commerce Department has spent Rs 1,000 crore allocated for interest subsidy for the current financial year, a benefit that is available to exporters from select sectors, and is now seeking an enhancement. They added that the annual subsidy outgo would be close to Rs 2,500 crore so that a wider section of exporters, especially the SMEs, could benefit.
Similarly, in case of Export Credit Guarantee Corporation, the idea is to take the coverage beyond the current level of 7% (of exporters) to the global average of around 20%. While the Government is favourable to the plan, the Finance Ministry needs to allocate funds. "It is not difficult for large exporters but it is the smaller players who need export credit insurance," said a source.
The Commerce Department, which has an allocation of a little under Rs 4,500 crore for the current financial year, is hoping that additional funds would be available in the supplementary demand for grants. In any case, it is showcasing its spending record to argue for more funds.
In case of services, the Government believes that there should be an enhanced focus on sectors beyond IT that is hit by protectionist regimes across several parts of the globe including the US, Australia and Singapore, which are restricting visas. As a result, the Commerce Department is of the view that services such as education and health would be better placed to tap into demand and also help scale up quality domestically.