Commerce and Industry Minister Kamal Nath is slated to meet Finance Minister P Chidambaram this week to sort out duty sops and credit-related incentives for exporters, besides pressing for tax incentives for export-oriented units. He will announce these concessions in the national foreign trade policy on August 31.

Official sources said Kamal Nath would push for a cheaper export credit for small exporters during the discussions. He is in favour of banks earmarking a fixed percentage of their credit for small exporters. At present, barely 7-8 per cent of the total credit is given for export purposes.

"Lowering the interest rate for small exporters alone will not be a viable option since the move is not WTO compatible. However, a fixed percentage can be earmarked for exporters by the banks," a senior official told Business Standard.

The government is also for recognising co-acceptance certificates issued by foreign banks to domestic exporters at par with letters of credit. This will simplify procedures for exporters and lower bank charges.

Nath is also expected to press for tax incentives to export-oriented units at par with special economic zones. The commerce ministry is keen to exempt EOUs from the service tax and central sales tax at par with SEZs. The move will benefit 1,814 EOUs in the country.

The government is also for expanding the scope of existing schemes such as the Export Promotion Capital Goods scheme. The officials said one of the measures being considered was to relax the import norms for second-hand machinery to allow smaller units to expand capacities.

In addition to this, the government is also considering relaxing the penalty norms for the export obligation.