The government is planning to expand the Market Access Initiative Scheme to include activities which will make export incentives World Trade Organisation compatible.
The scheme was introduced in the last year of the Ninth Five-Year Plan, and for the Tenth Plan, it has been devised to put in place instruments which are not only WTO compatible but also mitigate the negative effects of various handicaps faced by exporters vis-a-vis their counterparts in competing countries, said officials.
The MAI scheme would finance export promotion projects approved on a country-product focus approach basis.
The selection of projects and target countries for the purpose of the scheme would be on the basis of the Medium-Term Export Strategy Plan for each product group.
A high-level Empowered Committee will be constituted in the Department of Commerce for sanctioning projects.
The committee will also monitor the progress made in sanctioned projects and evaluate the impact of investments.
Among activities proposed to be included in the scheme are subsidisation of registration charges for pharmaceutical, biotechnology and agro-chemical products to be registered abroad.
Registration charges are often too high for mid and small sized firms operating in India.
The government also proposes to subsidise testing charges for engineering products and to earmark funds for WTO related matters under the scheme.
Assistance will be provided to cottage and handicraft units and funds earmarked to develop Web sites for virtual exhibitions etc to further increase competitiveness.
Assistance will also be given to recognised trade associations in industrial clusters for marketing abroad.
Export facilitation assistance will also be given to the Exim bank for providing project specific assistance for exports to select markets during specific periods.
In order to increase familiarity with the Indian market and products, the government will also provide assistance for reverse visits of prominent buyers and top journalists of leading trade journals from the project focus countries to visit important trade fairs and exhibitions in India, officials said.
Buyer seller meets, seminars and visits to important industrial units will also be financed under the MAI.
The need for a revamp of the scheme was felt as various incentives provided for promoting exports are getting increasingly constrained by the requirement of compliance with WTO rules and would have to be phased out.
Instruments available to neutralise the negative impacts of various handicaps like higher capital costs, higher tariffs, transaction costs and unrebated duties would no longer be available. This would effect export growth, officials pointed out.
Currently, the MAI provides finances for market studies, setting up of showrooms, warehousing facilities, display in international departmental stores, publicity campaigns, participation in trade fairs, brand promotion, quality upgradation and carrying out export potential surveys.