The Indian government has pledged an INR3.25bn (US$63m) stimulus package to help textile and leather exporters tackle the global economic slowdown.

The special measures announced yesterday (26 February) by commerce and industry minister Shri Kamal Nath, form part of a foreign trade policy supplement, and are due to come into effect from 1 April.

However, while specific details of the textile package have not yet been outlined, exporters are also expected to benefit from other relief measures proposed by the government.

These include an extension of the interest subvention scheme which gives exporters bank credit at a reduced rate of 2% until the end of 2009, and a drop in customs duty from 5% to 3% under the Export Promotion Capital Goods (EPCG) scheme

The Duty Entitlement Passbook (DEPB) scheme for exporters is being extended until 31 December, and a duty credit scrip can be used to pay duty of up to 5% of the value of an export contract.

It is also being made easier to claim duty drawbacks.

While the latest government measures go some way towards appeasing India's textile and leather exporters less than two weeks after the country's interim budget failed to include any measures to help the sector, one trade group says the package falls "far below expectations."

"These two sectors have been worst affected due to meltdown both in terms of production and job losses," says Mr Sajjan Jindal, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).