Exporters pitch for easy credit to keep momentum going

Despite the fact that India’s exports climbed 13 per cent to $26 billion in August, exporter associations have highlighted a multitude of stumbling blocks that plague various sectors. Due to these hurdles, exporters have been unable to reap the benefits of the rupee’s slide against the dollar.

The apex body of apparel exports, the Apparel Export Promotion Council (AEPC), has pitched for easy availability of credit for the industry, and has urged the government to keep the momentum of growth rolling, even though the sector is growing at double digits currently . While the Engineering Export Promotion Council (EEPC) has decided to involve foreign missions to step up engineering exports, the Federation of Indian Export Organisations (FIEO) has asked the government to bring exports under Priority Sector Lending to increase access to credit.

Speaking to

Business Line during the visit of the Commerce and Industry Minister Anand Sharma in Mumbai, FIEO president M. Rafeeque Ahmed said several non-performing sectors still needed support. “The entire export sector should be brought under Priority Sector Lending, especially since the Minister is urging for 20 per cent growth. The government needs to adopt a two-pronged strategy to support sectors like engineering and electronics which are still in the red,”' he said.

Anand Sharma, on the other hand, responding to a query from

Business Line said, “We have allowed the use of SCRIPS to strengthen domestic manufacturing. There are several sops that have been handed out to exporters, like the zero-duty Export Promotion Capital Goods (EPCG) scheme that allows import of capital goods for pre production, production and post production, all of which will aid exports.”''

Game-changer

The government’s move to allow the use of export incentive certificates or SCRIPS to source products locally and give export benefits to traders doing transactions online will be be a game-changer, Sharma said.

On September 12, the Department of Revenue clarified that the payment is not applicable in respect of goods procured indigenously, by availing the benefit of duty credit SCRIPS. FIEO’s Ahmed said the move would give a boost to domestic manufacturing and help in import substitution.

However, AEPC Chairman A. Sakthivel said, “The apparel industry is plagued with high interest rates and a weak infrastructure. Among our many demands, we have asked the government’s support on the duty credit scrip at the rate of 5 per cent.”'

Stating that the garment industry could achieve $12.92 billion exports in 2012-13, Sakhtivel said growth was a modest 13 per cent between April and July. “Easy availability of credit and availability of specialty fibre for domestic use still remains a bottleneck. We want currency swap for the sector, to explore the possibility of using local currency for trade with major trading partners,” he said.

EEPC India Chairman Aman Chadha said the sector could not take advantage of the falling rupee because of high import content in the production of engineering items. “While it is true that the overall exports have shown an improvement in August, it is not as if everything is back to normal. Things remain challenging especially for the engineering export sector,” he said.

>amritanair.ghaswalla@thehindu.co.in