Exim Bank encourages project exports to beat slowdown.

KOLKATA: Export-Import Bank of India is planning to beat slowdown and boost trade by accelerating efforts to grow funding for entrepreneurs who are ready to build projects overseas, especially in Africa.

A senior Exim Bank executive said project exports are most sustainable and have long term benefits while overseas demand for textile or gems and jewellery largely depends on income and economic prosperity. Local demand has remained muted too as the economy is facing a slower growth.

"What we are trying tell Indian companies is that the recession is affecting the progress of projects within India. So please look at overseas projects as an alternative," Exim Bank executive director David Rasquinha said Friday in Kolkata.

He told exporters to explore African countries for building projects as the US has not recovered fully while Europe is still not doing well. He said that seven of the fastest growing countries in the world are in Africa.

Setting up railway tracks, building power generation and other infrastructure facilities in overseas markets are known as project exports. Rasquinha said Exim is trying to encourage companies to take up such projects as these are most sustainable way of growing exports at the time of slowdown.

"We need to improve our exports in order to improve current account deficit. We need to look at exports which is sustainable. Engineering is only one of the top five items which is sustainable," Rasquinha said.

The present global economic scenario is perhaps not the ideal time for growing exports of discretionary products like textile or gems and jewellery. The US which is yet to recover fully has contracted in imports in recent months while Europe is still not doing well. The US is India's one of the top export destinations with a 12% share. European countries too are major trade partners.

Exim Bank with a mandate to boost international trade aims to grow project financing by 15-20% this year. It has two specific financing options for Indian companies building projects overseas -- line of credit and buyers credit, contributing to about 40% of its lending.

The bank expects its overall lending portfolio to grow 15-20% from Rs 66,000 crore last fiscal. It has given in principle sanction to projects worth $5 billion but expects a part of it to materialise this year.

Source : economictimes.indiatimes.com