NEW DELHI. Aug 7: The Indian government yesterday slashecTinterest rates by two per cent on shipment credits and offered more concessions to boost sagging exports, reports AFP.

It also appealed to India's business community to help achieve a 20 per cent export target during the current fiscal year ending March 1999.

Commerce Minister Ramakrishna Hegde told parliament he was doubling the period of tax exemptions to 10 years for export-oriented industries.

The package will stem the decline in exports, which shrunk seven per cent in the first two months of the year to March 1999 compared with the same period the previous year, Hegde said.

He also offered concessions to the software industry and said a "special package" for the electronics sector would be unveiled soon to improve exports.

The reduction in interest rates on shipment credit from 11 to nine per cent would be available to exporters until the

end of the financial year, Hedge said.

This reduction is ordered as the exporting community had cited high cost of credit as a major reason for the difficult export performance which registered a negative eight per cent growth in the first quarter of this financial year."

Hegde said the government would pay interest to exporters in case government dues were delayed beyond two months," this will come into operation from September 1;"

He said the commerce ministry would also extend banking concessions to exporters "with a performance of over one year of unblemished record" in a bid to help them widen their working capital.

"To give a boost to export of processed foods, horticultural and floricultural products, the duty on cooling equipment will be revised to reduce costs."

The minister noted that India’s trade deficit 'widened to 2,100 million dollars in the first quarter of the current fiscal as against 1,400 million dollars during the corresponding quarter last year.

India's Hindu nationalist-led coalition government has said it would try and stop the downturn and achieve a target of 20 per cent growth in the current fiscal.

Hedge, meanwhile, in separate meetings with heads of the country's top 22 corporate groups appealed Wednesday for cooperation to boost India's overseas sales, officials said.

"We want the top corporates to increase their exports, there will not be any revision on our export target." Hegde told reporters after meeting some of the business leaders.

Officials said Hedge held ■ talks with executives from groups such as Biralas' Tatas'. Reliance Industries. BajaJ and

Exports growth in the 12 months to March 1998 stood at 2.6 per cent, earning 33.97 billion dollars against a targetted 40 billion dollars.

Analysts blamed the regional financial turmoil for India's sinking exports. India's trade position has been further undermined by western sanctions following its series of nuclear tests in May.