The Federation of Indian Export Organisations (FIEO) has urged the Centre to seriously consider including the whole of Europe under the focus market scheme (FMS).

“The prevalent crisis of confidence in the European market, which has been triggered by the sovereign debt crunch in Greece, has prompted us to push for such a recommendation,” said FIEO president A Sakthivel in an exclusive interview to Bizxchange.

“The government should extend focus market benefits to all the member states in the European Union,” Mr Sakthivel added.

Launched in April 2006, FMS is a government initiative to improve competitiveness of Indian exporters, including SMEs, to select foreign nations identified as ‘focus markets’. Currently, the Centre provides 3% duty credit scrip of free-on-board (FOB) value of exports to nations covered under the scheme.

At present, eight European nations comprising Moldova, Bosnia & Herzegovina, Belarus, Serbia, Albania, Montenegro, Croatia and Macedonia qualify for export benefits under FMS.

Commenting on FIEO’s suggestion, Tilak Raj Manaktala, vice president of Delhi Exporters Association (DEA), said “The proposal is quite relevant in view of the current financial turmoil in Europe, particularly the Eurozone. In such a tricky business environment, SME exporters need a kind of government protection over that of scheduled industries and extension of focus market benefits will act as a support in tough times. However, the percentage point of support on FOB needs to be enhanced.”

When asked about the present export scenario, Mr Manaktala said, “It is more of a wait-and-watch policy. SMEs having burnt their fingers in the US market are wary of the executions in hand as well as of future business, which given the present conditions are more on credit, thereby increasing the risk factor.”

Incidentally, the country’s total exports surged by 35.1% to touch US$16.1 billion in May 2010, improving for the seventh month in a row.

Jeeta Bandopadhyay