Indian exports achieved a key milestone when it crossed the psychological barrier of USD 100 billion in 2006 with a growth rate of 24% and over 13% of total gross domestic product (GDP) valued at USD 800 billion compared to 6% in 1990-91. Government officials are confident that the nation will meet export target of USD 125 billion this fiscal year ending March 31. Commerce and Industry Minister Kamal Nath had revealed that from April 2006 to November 2006, exports grew at 29% to USD 80 billion.

India’s trade policy as projected in the Annual Supplement of the Foreign Trade Policy states that employment generation in the export sector must be achieved meaning that high-value imports using large capital outlays are less important than labor intensive projects. To this end, the government highlighted several initiatives it kicked off in 2006:

1. 1. To encourage investments in labor intensive sectors such as fish and leather products, stationery items, fireworks, sports goods and toys, and handloom & handicraft items, the government introduced the Focus Product and Focus Market Scheme allowing duty credit facility at 2.5% of the value of exports of specific products and notified countries.

2. 2. The government expanded the Vishesh Krishi Upaj Yojana to include village and cottage industries and launched a new initiative called the Vishi Krishi Upaj Aur Gram Udyog Yojana to provide 5% duty-free scrip on exports.

3. 3. There was a concerted push for gem and jewelry making and creation of an automotive hub by allowing easier product movement across the borders and allowing import of precious metal scrap for refining.