Informist, Friday, Jul 5, 2024

--Source: Govt may announce export development fund in FY25 Budget

--Source: Govt mulling export development fund worth 30-40 bln rupees

--Source: Govt mulls export fund to subsume Market Access Initiative

By Krity Ambey

NEW DELHI - The government is considering setting up an export development fund in the upcoming Budget for 2024-25 (Apr-Mar), which was one of the recommendations put forth by export promotion councils in pre-Budget consultations, a trade ministry official said.

The fund is likely to be a part of the Budget allocations for the commerce ministry, subsuming the allocations for export promotion activities and schemes such as the Market Access Initiative Scheme, the official told Informist.

The government is likely to allocate 30-40 bln rupees for the dedicated fund in the upcoming full Budget, as against 19.39 bln rupees allocated for export promotion schemes in the Interim Budget presented on Feb 1, the official said. Under the umbrella of the export development fund, the government may subsequently make allocations for export promotion councils, and commodity boards, the official added.

The officials of the commerce department, along with representatives from export bodies, had met Finance Minister Nirmala Sitharaman for a pre-Budget consultation last week. Among the various demands, the export bodies also sought higher allocation for the Market Access Initiative Scheme. Sitharaman is likely to present the Budget later this month.

Under the Market Access Initiative Scheme, the government carries out research to identify the right products for an international market, then implement a country-specific strategy to boost exports. The government also provides financial assistance to exporters to sell more of their products by funding activities related to market expansion. The Interim Budget has allocated 2 bln rupees for the scheme.

The export development fund is aimed to help the Indian industries reach the export target of $1 trln by 2030, the official said. In 2023, the trade ministry had set the aim to achieve exports worth $2 trln by 2030--that includes $1 trln of each merchandise and services exports.

Ramping up export promotion activities is the need of the hour and the trade department is trying to explore new markets after the setback last year, the official said. India's merchandise exports shrank 3% in 2023-24 to $437.06 bln owing to the slump in demand from traditional markets like the US and the European Union on account of an economic slowdown.

The commerce ministry is exploring new export destinations in Latin America to protect Indian exports against the cascading effect of the economic slowdown in the US and Europe. The trade ministry has also been negotiating for a free trade agreement with Peru to increase its footprint in Latin America. End

US$1 = 83.48 rupees

Edited by Vandana Hingorani

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