Interim Budget 2024 Expectations: 5 ways to boost export growth

Ahead of the Interim Budget 2024, the Federation of Indian Export Organisations offers perspective on crucial areas that could significantly impact India's export landscape, fostering economic growth and sustainability.

Ahead of the upcoming Interim Budget 2024, Israr Ahmed, President of the Federation of Indian Export Organisations (FIEO), outlined key recommendations, which address critical aspects of India's economic landscape and foster sustained growth in exports:

1) R&D Support for Export Growth

Israr emphasized the importance of Research and Development (R&D) in enabling innovation and manufacturing across various sectors. Highlighting the disparity in India's R&D spending (less than 1% of GDP) compared to other major nations, Israr proposed an increase in weighted tax deduction under Section 35(2AB) from 100% to 200% to align with global practices.

2) Development of a Global Shipping Line

Commending the government's efforts in promoting self-reliance, particularly in container manufacturing, Israr advocated for the establishment of an Indian Shipping Line with global recognition to reduce outward remittances on transport services and enhance MSME resilience.

3) Increased Allocation for the MAI Scheme

Stressing the need for aggressive export marketing to achieve the target of USD 2 trillion exports by 2030, Israr called for a substantial increase in the allocation for the Market Access Initiative (MAI) scheme to create a corpus of 0.5 per cent of the preceding year's exports.

4) Financial Outlay for the District as an Export Hub (DEH) Scheme

Israr proposed a District as an Export Hub (DEH) scheme to address supply-side challenges at the district level, fostering exponential growth in exports.
He recommended the introduction of a pilot scheme in 50 districts with a corpus of INR 5000 crore, shared between the central and state governments.

5) Extension of Sunset Clause for New Manufacturing Companies

Highlighting Section 115BAB, which offers a low tax rate of 15% to new manufacturing companies, Israr recommended an extension of the sunset clause for commencing manufacturing from March 31, 2024, to March 31, 2027, to encourage further investment in the manufacturing sector and exports.