The Federation of Indian Export Organisation (FIEO) has appealed to the Commerce Ministry for interest rate subvention and the extension of duty entitlement passbook scheme.
At an interactive session with the Commerce and Industry Minister Anand Sharma, FIEO president Ramu S Deora highlighted the constant increase in export credit rate over the last one year and said Indian exporters are competing with countries where the base rate is below five per cent.
In India, the base rate has moved up between two per cent and 2.5 per cent in the last seven to eight months pushing up export credit, he stated. On the contrary, interest rate subvention for exports has been withdrawn from April 1, 2011.
Thus cost of export finance, which was seven per cent in July 2010 has now moved up between 11 per cent and 11.5 per cent, a whopping rise between 57 per cent and 64 per cent.
He also urged the Minister to prevail upon the government to provide export credit to Micro Small and Medium Entreprises sector at seven per cent and others at nine per cent to maintain export momentum.
FIEO also expressed concern over the appreciation of the rupee which firmed up by 3.6 per cent in 2010.
“This will affect the exporters in a big way,” he said. Deora said that the
DEPB scheme has been a time proven instrument to help Indian export grow to the present level.
“DEPB is well suited to the needs of small exporters since it is not feasible for them to effect imports on their own account as economic volumes are not generated. The uncertainty over continuation of the DEPB scheme beyond June 30, 2011 has been a cause of concern to the exporters which may taper down the growth,” the FIEO chief observed.
He urged the ministry that DEPB scheme should be extended till Goods and Service Tax becomes operational or at least till the end of the financial year.
Source : expressbuzz.com