Exporters said the RBI’s decision to relax bad loan classification and provide refinance facility would help the sector to some extent, especially the smaller units, but a comprehensive economic package with enhanced sops was required to help them survive the “unprecedented’’ challenge posed by the worldwide Covid-19 lockdown.
“Under these circumstances (of global lockdown), the merchandise exporters face the gravest of threats and would need a special package from the RBI and the government. Exports, at this point of time, are strategic to our economic security,” said Ravi Sehgal from the Engineering Exports Promotion Council of India.
Sehgal pointed out that as China was recovering from the impact of the pandemic, it would flood the desperate global markets with essential supplies. “India needs to have a specific strategy which should ride on empowering exporters to deal with this unprecedented challenge,” he said.
According to World Trade Organisation estimates, world trade is likely to decline by 13-32 per cent in 2020 due to the Covid-19 crisis.
India’s exports plummeted 34.57 per cent to $21.41 billion in March 2020 compared to the same month last year as the spread of Covid-19 across countries disrupted production and supply chains. It is expected to fall further in April with a large number of buyers cancelling orders when production stopped in the country due to the lockdown implemented on March 25.
Exporters’ body FIEO stressed that exporters’ interest should be given priority in the economic package being formulated by the government as they were the worst sufferers facing challenges both at the domestic turf and in the global market.
Extension of pre- and post-shipment credit tenure, interest equalisation scheme, interest-free loan to cover forward losses, automatic enhancement of limit by 25 per cent without further condition/collaterals, enhancement in MEIS rate by 2 per cent for all sectors and 4 per cent for employment intensive sectors and amnesty for the default under Advance/EPCG authorization/EOU are some of the benefits that should be offered, pointed out FIEO chief SK Saraf.
He said that refinancing of ₹15,000 crore to SIDBI and 90 days NPA norms to exclude moratorium or deferment period will give relief, particularly to MSME units, which were struggling to stay alive with no business but are saddled with fixed costs.