India needs to reduce the cost of credit and address infrastructure bottlenecks to revive the growth in exports, an industry lobby said on Sunday ahead of the announcement of the annual supplement to Foreign Trade Policy 2009-14.
The government should also continue with focused product and market schemes and give special attention to apparel and auto sectors to revive exports growth, the Confederation of Indian Industry (CII) said in a report.
The CII has made a number of recommendations to boost exports in line with India's export target of $500 billion by 2014.
Medium and short-term supportive measures proposed for Foreign Trade Policy include continuation, along with broadening, of the focus market scheme and the focus product scheme.
Market-kinked focus product scheme benefits may be extended to select chemical products and also to auto components, the CII said.
Recently, the Reserve Bank of India in its mid-quarter monetary policy review stated that sluggish demand from advanced economies decelerated exports, while moderation in imports was less pronounced.
Trade deficit during April-January 2011-2012 was $148.7 billion as against $105.9 billion during the corresponding period of last fiscal.
Another worrisome trend which was adding pressure on India's external sector was the current account deficit touching nearly 4.3 percent the country's gross domestic product in October-December 2011 as against 2.3 percent in the corresponding period a year-ago.
"Such a sharp widening of current account deficit has been witnessed for the first time in about two decades and this demands a quick policy intervention to arrest this dismal trend," the CII said.
The CII report pointed out that the apparel sector was facing issues of migration of production to other countries and needed special attention.
Apparel exporters suffered from lack of clarity in permitted imports of capital goods under status holder incentive scrip. Some equipment imports related to safety and expansion rather than upgradation should be facilitated, it said.