Exports of garments and all leather items to the European Union and the US from April 1 this year will be entitled to a two per cent incentive from the Government.
This incentive will be available for exports up to the end of September 2009. They will come in the form of duty-free credit scrips under the market-linked Focus Product scheme, according to the Union Commerce and Industry Minister, Mr Kamal Nath.
Meanwhile, Mr Kamal Nath also said that the Reserve Bank of India had room to cut policy rates further as inflation had eased.
“I think with inflation close to 3 per cent, RBI will and should look at incisive methods to stimulate the economy, which includes interest rates,” he noted.
In the recent interim trade policy, the Commerce Minister had announced a special package of Rs 325 crore for the leather and textile sectors.
The Federation of Indian Export Organisation (FIEO) President, Mr A. Sakthivel, welcomed the latest decision and noted that “such prompt action was the need of the hour”.