Export Transaction Cost To Be Cut.

NEW DELHI: The government on Tuesday announced steps to lower the transaction cost for Indian exports in a bid to make them more competitive in the global market.

Though a panel headed by junior commerce minister Jyotiraditya Scindia estimated that Indian exporters were burdened with additional costs of around $15 billion (around Rs 67,000 crore) due to bureaucratic and infrastructure hurdles, it also recognized that the government could only step in to do away with costs to the tune of $6 billion (around Rs 27,000 crore). But it seemed to be taking baby steps by announcing measures that will address transaction costs of the order of Rs 2,100 crore (around $467 million)-7.8% of the achievable target.

Scindia himself admitted that these were "low hanging fruits" and the bigger issues such as higher port charges and freight rates were yet to be addressed. Officials in the commerce department said issues of freight rates might be tough to deal with given that Concor's revenues might be affected. One option was to increase private sector participation.

In case of port charges, commerce and industry minister Anand Sharma said that the solution lay in higher investment and enhanced capacity. "Please understand that these are not easy to complete because there are revenue ramifications for the shipping department and the railway department. We need to build a lot of consensus," Scindia added.

This is the first time that the government has released a report along with steps initiated by it to address the concerns. Of the 44 issues identified by the task force, 21 have been addressed through inter-ministerial consultation, while action on two more is expected over the next two months. The measures announced on Tuesday included round-the-clock staffing at some of the country's biggest ports and giving speedier clearances to farm and health products.

"We are committed to help the exporters. We recognize that it is essential to first of all reduce the total time taken for exports-the time cargo is ready in the factory till it leaves the Indian shore. Second, we need to take measures that will reduce the financial cost of export transactions," FM Pranab Mukherjee said.

Source : timesofindia.indiatimes.com