The government aims to help boost farming exports

The package should enable it to double its share of global trade by 2009.

The government is to set up free trade zones, where foreign companies can invest without paying duties, and improve trade infrastructure.

Commerce and Industry Minister Kamal Nath also unveiled plans to boost the export of gems and agricultural goods.

Chasing China

"The policy will also focus on employment generation, besides giving a push to exports to garner 1.5% of the world share by exporting $150bn (�83bn; 123bn euro) worth of merchandise annually by 2009," Mr Nath said.

India, which currently has a 0.8% share of global trade, hopes to catch up with China.

China's exports totalled $309.1bn between January and July of this year.

India's exports totalled $61.84bn for the fiscal year ending March 2004.

Broad support

The government has forecast that exports should grow by 16% to $73bn in 2004/2005.

It has however admitted that higher global oil prices and the strengthening of the Indian rupee would pose a challenge.

Analysts broadly welcomed the measures.

"It is a very good idea," said Saumitra Chaudhuri, economic adviser with credit rating agency ICRA.

"It will lead to dynamic trade relations within the regions and be beneficial for longer-term growth."