Exporters ask for separate status to obtain credit .

The Federation of Indian Export Organisations (FIEO) — the apex body of exporters — has asked the Directorate General of Foreign Trade (DGFT), under the Commerce Ministry, to take up with the Reserve Bank of India its demand to treat exports as a separate category for the purpose of credit.

Mr A. Sakthivel, President, FIEO, raised this demand during the Sectoral Review meeting convened by the DGFT this week seeking suggestions to provide further impetus to Indian exports, FIEO said in a statement. It also said the RBI should bring a separate chapter on exports in the new credit policy due in April, adding that “this will send a signal to the banks that export is a priority area for the Government.”

The federation said with the adoption of the base rate by banks, the concessional credit to exporters has been abolished. Under the earlier regime, banks were extending credit to exporters at 2.5 per cent below the prime lending rate, it said. Moreover, export credit rate in India is above the international benchmark and the gap is likely to be increased further with interest rate looking northward, the FIEO said.

It added that banks are refusing to provide dollar loans to exporters at the prescribed affordable rates. Besides, exporters are being charged high banking charges, FIEO said. It asked the Government to direct banks to rationalise banking charges. To bring transparency, banks also should be asked to display the banking charges on their Web site, it said.

promotion schemes

Apart from this, FIEO demanded continuation of all export promotion schemes, including the Duty Entitlement Passbook (DEPB) Scheme, till March 31, 2014. The DEPB Scheme neutralises basic Customs Duty, which is not covered under Goods and Services Tax, and thus, should continue even with the adoption of GST, it said.

The entitlement under Focus Market Scheme, Focus Product Scheme (FPS) and market-linked FPS should be doubled so that exporters are encouraged to diversify their exports into new product and markets, FIEO said.

Mr Sakthivel said India's exports are likely to touch a new milestone of $210-$220 billion this fiscal.

The growth in export is due to the overall improvement in the export scenario, diversification of export markets and the various proactive initiatives taken by the Government, he said. However, exports need a further push in view of the fragile market conditions and financial crisis looming over many European countries, he added.

Source : thehindubusinessline.com