In the Foreign Trade Policy (FTP) supplement released today, Commerce and Industry Minister Anand Sharma has announced a seven-point agenda to help the export sector, which has been facing demand contraction in the global markets.

The government announced sops like interest subsidy for some labour intensive sectors such as textiles and carpets, which have fared the worst in the last financial year.

"We have now decided to extend the scheme (interest subvention) for another year till March 31, 2013 and expand its coverage to include other labour-intensive sectors namely toys, sports goods, processed agricultural products and ready made garments", Sharma said while releasing annual supplement to the FTP in New Delhi on Tuesday.

In the FTP, the zero percent EPCG scheme has also been extended to end of current fiscal.

Some of other measures introduced in the FTP include expansion of the scope and coverage of special markets scheme. "We have expanded scope and coverage of special markets scheme to 112," Sharma said.

He also announced setting up common service centres, common service providers in towns of export excellence to extend bank support.

"It is our expectation that with these measures, we shall be able to sustain an annual export growth of 20 percent this fiscal", he said. India's exports grew by 21 percent in 2011-12 to touch USD 303 billion.

The commerce minster added that the year ahead is full of challenges, current challenges are very disturbing. "It will take time for demand to return to pre-crisis levels," he said while announcing the FTP measures.

"The underline philosophy of this year's supplement is based on seven broad principles", Sharma said, adding these would include added thrust on employment-intensive industry and continuation of market diversification strategy.

According to an internal study conducted by the Director General of Foreign trade (DGFT), export sectors such as handicrafts and carpets has declined during 2011-12 against 2010-11.

While carpets export declined by 19 percent in 2011-12 at $0.840 billion as against 1.03 billion during the year ago period, export in handicrafts (excluding hand-made carpets) declined 23.17 percent at $0.196 billion in 2011-12 as against $0.257 billion in the previous fiscal.

According to recently released foreign trade figures, sharp fall in exports from some key industrial sectors dominated by small and medium enterprises has been witnessed.

The gems & jewellery sector witnessed the sharpest fall in April, with 25.7 percent contraction in overseas shipment, followed by readymade garments that suffered 9 percent fall in exports during the same period.

The leather sector also saw muted demand in April, growing at a slow pace of 3.2 percent, while exports from electronics and plastic sector registered only 5.4 percent and 2.7 percent growth, respectively.

A seven-point strategy to boost exports in the annual supplement to foreign trade policy 2009-14 includes:

• To give a focused thrust to employment intensive industry because we view exports not only in terms of their economic contribution but as a means of generating gainful employment;

• To encourage domestic manufacturing for inputs to export industry and reduce the dependence on imports;

• To promote technological upgradation of exports to retain a competitive edge in global markets;

• To persist with a strong market diversification strategy to hedge the risks against global uncertainty;

• To encourage exports from the North Eastern Region given its special place in India's economy;

• To provide incentives for manufacturing of green goods recognising the imperative of building capacities for environmental sustainability; and

• To endeavour to reduce transaction cost through procedural simplification and reduction of human interface.