An announcement to this effect is expected anytime after September 30, when the commerce department wraps up its assessment of the performance of various export sectors.
"Something would be announced definitely. But it will be limited by budget constraints," commerce and industry minister Anand Sharma told ET. The minister had announced a Rs 1,600-crore package for exporters in June, the effect of which is expected to kick in by October.
A commerce department official said the new package would focus on items that have recorded the sharpest fall in exports over the past few months, such as engineering products and textiles. "Sops are also on the cards for promoting exports to advanced economies where India's share is less than 1 per cent of total imports," the official added.
Exports fell 5.9 per cent year-on-year in the first five months of the fiscal due to continued uncertainty in the US and the EU, which together account for more than a fourth of the country's exports.
Sharma also said that efforts were on to extend discounted credit to more products.
"We have already expanded the list of products under the interest subvention scheme in June. I am trying to get a few more products added."
In June, the subvention scheme was extended mostly to labour-intensive products. According to the official quoted earlier, the department is now trying to include some large-scale industries, such as gems and jewellery, auto components, leather and pharmaceuticals.
The overall size of the package is expected to be paler than the previous one. "This time round, the incentives could be on incremental exports, over and above what the exporters did last year," said Ajay Sahai, director-general of the Federation of Indian Export Organisations.
Growth in global trade has been sluggish due to the uncertainty in the global markets. The World Trade Organisation recently lowered it world trade growth estimate for this year to 2.5 per cent, from 3.7 per cent made in April, citing the Eurozone crisis as reason.
"Global markets are doing badly. Orders are not coming from the EU as importers are scared and don't know what the future holds. The US, too, has not revived," said Delhi Exporters Association president SP Agarwal.
Agarwal said an incentive package may not be enough to boost exports and that the government needed to reduce input costs by doing away with input taxes.
"We have to pay both service tax and VAT, which adds substantially to our costs and makes us incompetitive in the international market," he said, adding, "Our plea for exemption is being continuously ignored by the government."
India is targeting $360 billion in exports this fiscal, up nearly 20 per cent from the $306 billion achieved in the previous year.
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