The Commerce and the Finance Ministries are now seen burning the midnight oil to come to some consensus on the incentives to be provided to the exim community in the forthcoming Foreign Trade Policy.

I am told our Commerce & Industry Minister Mr Kamal Nath was seeking Prime Minister Manmohan Singh’s support for providing these incentives following which the unveiling of the Foreign Trade Policy has been postponed to April 7.

The Commerce Minister has rightly asked for the Prime Minister’s intervention in breaking the deadlock with the Finance Ministry. The Finance Ministry is being unjust by saying that it does not want any new schemes which will increase the notional revenue foregone on export promotion. Its logic that if a new window of incentives has to be opened then some other window should be closed or curtailed so that the net cost remains the same is really ridiculous to be least critical.

I have seen even developed nations providing export support and it still eludes me as to why the Finance Ministry is against it.

The imposition of a sunset clause to limit the income-tax holiday available to special economic zones (SEZs) too needs to be discussed and a final position has to emerge in the proposed legislation on SEZs.

Global competition being very stiff, unless the government provides certain incentives to ease the exporter’s burden, the dream of doubling India’s share in global trade within five years will remain just a dream. The exim Inc. will definitely not like that and neither will the govt. At least I would like to believe so!