Commerce & Industry Minister Kamal Nath is likely to relax the norms for import of capital goods by removing the restrictions on import of machinery which are over 10 years old.

The liberalised norms, to be announced in the Foreign Trade Policy on Tuesday, will be applicable across the board, including the Export Promotion Capital Goods scheme.

Besides, the government will unveil the 'Visesh Krishi Upaj Yojana' to boost agricultural exports and and 'Served from India' for the service sectors as part of its promotional measures, officials told Business Standard.

The Foreign Trade Policy for 2004-09 will also launch 'Target Plus' scheme for physical exports that exceed the annual target by 4 per cent.

This would effectively take the annual export target to 20 per cent, which is also the minimum required for India to achieve the new target of 1.5 per cent share in global trade by 2009. The government was earlier targeting 1 per cent share in world trade by 2007.

In line with the National Common Minimum Programme's focus on the farm sector, exporters of agricultural products like fruits, vegetables and flowers will be allowed to import duty free inputs equal to 5 per cent of the FOB value of the annual exports under the Visesh Krishi Upaj Yojana.

The duty free entitlement would be encashable and freely saleable, officials said.

The Duty Entitlement Passbook Scheme is expected to continue till a new scheme is announced. The government is also planning to exempt export oriented units from service tax and education cess to bring them at par with units in Special Economic Zones.

The 'Served from India' scheme for service exports goes beyond the Duty Free Entitlement Certificate scheme exporters to import consumables, office and professional equipment, spares and furnitures equivalent to 10 per cent of the average foreign exchange export earnings in the previous three years.

The new scheme allows duty free import entitlement irrespective of the export income. For stand alone restaurants, the government plans to double the entitlement to 20 per cent, while the benefit for hotels will continue at 5 per cent.

The policy will also lower the threshold limit for towns of export excellence from Rs 1,000 crore (Rs 10 billion) to Rs 250 crore (Rs 2.50 billion).