India opens doors to exports

Liberalisation moves drew praise from business leaders

India has announced plans to remove export restrictions and cut red tape in a move designed to increase its share of global trade.

Maran announces "radical steps"

Announcing the policy, the Indian Commerce Minister, Murasoli Maran, said the proposed five-year plan represented a radical new step to slash export barriers and offer greater freedom for Indian importers.

Mr Maran said only a few selected items would remain subject to restrictions and would continue to be exported through state-owned enterprises.

He said the measures were in line with a World Trade Organisation ruling requiring India to liberalise its markets.

Sector reforms

The plan provides an incentive package for the electronics hardware industry, to help it catch up with India's software sector, a leading global player.

The government also abolished import duty on uncut diamonds which should put India on the road to becoming "a major international centre", Mr Maran said.

But the plan will mainly affect the farm sector that provides income for 70% of Indian households and had, until recently, missed out on the country's economic liberalisation drive.

Measures to help the farm sector would include lower transport costs and freeing curbs on agricultural exports to boost rural purchasing power and create "phenomenal effective demand", Mr Maran said.

Other sectors, such as India's key handicrafts industry, will also receive aid.

Business praise

The five-year trade policy drew praise from business leaders.

"Without removal of these restrictions, you can't have a big boost in exports," Federation of Indian Chambers of Commerce & Industry Secretary General Amit Mitra said.

Despite its population of more than one billion people, India has just 0.67% of world trade.

It aims to push that figure to 1% by 2007.