The State government has drawn up a draft Kerala Export Promotion Policy, designed to unlock “the full potential of the state’s exports” by empowering exporters, opening new avenues for trade and positioning Kerala as a preferred destination for international business partnerships through targeted strategies.
Drawn up by the Kerala State Industrial Development Corporation (KSIDC) for the Industries and Commerce department, the draft policy, among other things, seeks to “establish a robust and supportive ecosystem for export-oriented businesses.”
The policy will be applicable to manufacturing/producing/service-oriented exporters as well as merchant exporters with or without warehousing.
Incentives and backups
It proposes frameworks for financial incentives and institutional backups for exporters. Fiscal incentives suggested in the policy include an Export-based Capital Investment Subsidy (a subsidy of 35% of the capital investment cost, limited to ₹2 crore per entity), Export Infrastructure Support (a one-time subsidy of 25% of the infrastructure investment, limited ₹50 lakhs per entity), and Export Turnover-based Incentive (incentive of 1% of Free Onboard Value (FOB) value, limited to ₹1 crore per annum for three years).
The policy aims to provide export-oriented skill development programmes and export promotion agencies to support businesses at various stages of the export cycle. The government will establish an “effective, proactive, and supportive institutional mechanism, through the existing entities, for the rapid growth of exports,” it said.
State desk
‘Supportive institutional mechanisms’ proposed include a State Desk for Export for speedy grievance redressal, operationalising Export Promotion Committees (EPCs) at State and district levels to prepare district-wise export profiles, and facilitating the formation of export consortiums or clusters where exporters within specific industries collaborate and share resources and knowledge.
The draft policy lists 12 ‘high-growth potential areas’: Spices, horticulture and agriculture produce; shrimp and other marine products, processed food products, engineering goods, petrochemical products, organic and inorganic chemicals, textiles and garments, defence and aerospace, electronics and allied manufacturing, ancillary engineering and technology, Ayurveda and pharmaceuticals, and services, including IT and healthcare.
The absence of a ‘suitable State export policy’ and district export plans, and heavy reliance on a few commodities and countries for exports have been cited as the reasons for Kerala being ranked low among coastal states. The State was ranked 16th among all states in the value of merchandise exports during 2022-23. The Export Preparedness Index-2021 released by NITI Aayog had ranked the State 16th among all States, according to the draft.
The KISDC has invited views and suggestions from stakeholders and the public on the draft which can be accessed at https://www.ksidc.org/initiatives/draft-kerala-export-promotion-policy-2023. The policy is expected to be finalised and approved by January 2024. According to the draft, it would come into force by April 1, 2024.
