Indian Apparel Industry Benefits From New Foreign Trade Policy

In addition to labor-intensive industries such as carpets, handicrafts, handlooms and small and medium-sized businesses, today, the Minister of Finance of India, Mr. Anand Sharma, has extended incentives to the apparel sector in India. In announcing the addition of the annual foreign trade policy, he said: "We have decided to extend the interest subsidy program for another year until March 31, 2013."

In addition to the industries that were eligible for the interest subsidy program last year, more industries will benefit from this program, such as clothing, toys, sporting goods, and processed agricultural products.

According to the interest subsidy program announced last year, carpets, handicrafts, handlooms and small and medium-sized businesses received a 2% interest subsidy.

Mr. Sharma optimistically believes that with the help of these measures, India's exports will be able to maintain a 20% growth rate. In fiscal year 2010-11, India’s exports increased by 21% to US$303 billion.

Among the other measures he announced, foreign trade policies will help reduce transaction costs. Negotiations with the EU’s comprehensive trade agreement will enter the advanced stage, and zero-tariff capital goods exports will be extended for another year.

He also stated that India is currently negotiating with Australia, New Zealand and Canada on the free trade agreement, with special emphasis on promoting North-East India exports and extending export incentives to the United States and the European Union until March 31, 2013.

He also said that the Ministry of Commerce is drafting new guidelines for special economic zones (SEZs).