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Exports are the major focus of
India's trade policy. The export sector is a core sector in the economic
growth of the country and is important for addressing macro economic
concerns. The incentives offered by the export promotion package is
comparable to that of any other country. The focus remains on inducing
the foreign investors to set up export oriented units in India. India
offers a production base for foreign markets around the world for
sourcing components and products manufactured at a low cost.
Export growth has shown a downward trend since the year 1996. Export
growth during April-February 1997-98 is placed at 2.63% in dollar terms
over that of the corresponding period in 1996-97. The 1997 figures stand
at only 4%.
The performance in the current fiscal year (1997-998) has been erratic
- there was a sharp decline in the first quarter, which was somewhat
reversed in the second quarter, again to slow down in the third quarter
with a slight improvement noted in the month of February 1998. The slow
growth may be attributed to both domestic and international factors
besides sectorial problems and difficulties. The amendments to the Exim
policy announced by the Government in April 1998 have been framed
keeping in view the fact that it would take some time to achieve high
growth.
Opportunities
India's strategic location, between Middle East and South East Asia,
presents itself as a country with immense business opportunities. Its
neighbors include Pakistan, China, Nepal, Sri Lanka and Bangladesh. The
countries labor advantage adds to this. India has vast reserves of
technical and scientific manpower, backed by engineering and management
institutes of excellence. India's skilled labor is in great demand in
the world's premier organizations. Both skilled and unskilled labor is
easy to find and wage rates are highly competitive compared to
international levels. Language is not a barrier as the professional work
force is conversant in English and the main transactions and procedures
are done in the same language. The government also provides a number of
incentives and facilities for exporters. India's rich resource and
production base provides significant opportunities for investors to
establish export units.
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