Exports of paints is always taken as a low priority item for the Indian paint industry on the grounds that it is not a very high-tech product and almost all countries in the world have developed their own domestic industry.

However, a changing trend depicts exports of certain products on the increase in recent times. A high-level meeting of the paints, varnishes and allied products panel of Capexil held last week assessed the export performance of the industry for the year 1998-99. Top officials of the member companies have put forward their suggestions on improving the export prospects for the concerned industry. To overcome the set-back suffered after the Russian disintegration and low export to this country of late, the panelsuggested that the government should try to extend longer credit terms to exporters upto 12 months against direct export and 18 months of consignment sales.

Moreover, as Russia and CIS happen to be major markets for paint items, it was suggested that the Indian government could weigh the prospects of opening up a few warehouses in these countries. This would go a long way in boosting up export of Indian goods including paints in these countries.

Reduction of freight charges in the form of concessional shipping freight from India to these countries could open up better prospects for exports. This was warranted in the light of a strong competition with its European counterparts.

The panel also pointed out that a flat norm or rate be fixed for the entire range of paints or atleast for a particular type of paint like synthetic enamel as a part of a simplified procedure in the advance licensing scheme or DEPB scheme. Synthetic enamel alone, it may be noted has six different sets of norms. Enamel paints andprimers among others are considered as semi-hazardous cargo in certain parts of the world, and there are a lot of restrictions in loading and stuffing of these from ports. Moreover, shipping companies often charge an additional hazardous cargo surcharge but without any liability on the shipping company on account of any damage to the cargo in the event of an accident. This forces the exporters to look for alternative modes of transport and which subsequently leads to higher costs.

While it is true that some paints like NC paints may be considered hazardous, synthetic enamels and primers are not really dangerous and hence shipping restrictions should be lifted, say the members of the panel.

The panel has also recommended that the time period for repatriation of export proceeds be extended from six months to one year and for consignment sales from one year to 18 months. This is especially helpful in the case of paints which are seasonal products and if consignments arrive at the end of the season or remainunsold, they would require storage for three to four months before they can be marketed again.

According to the panel, there is a possibility of increasing export of paint and allied items to the neigbouring countries including Nepal provided some legal system for realisation of sale proceeds can be developed. Since paint items cannot be supplied to Nepal or any other neighbouring country on an advance payment basis, it was suggested that the government should introduce some kind of a time-bound payment system which may render it possible to effect increased supplies of paints to these countries.