Reeling under sliding exports due to slow global demand, exporters have been urging the government for some time now to release the interest subvention allocated in the Budget.
The commerce ministry is considering incentives worth Rs 3,000 crore under the Merchandise Exports from India Scheme (MEIS) amid exports registering fall for the ninth straight month in August, declining by 20.66 per cent from a year earlier to $21.26 billion.
Officials told The Indian Express that the commerce ministry has assured exporters in a meeting last week that “more products will be added under the MEIS both top best-performing products and the ones which have been performing poorly with the allocations being increased from the earlier Rs 18,000 crore to Rs 21,000 crore”.
Further, in the meeting, chaired by commerce secretary Rita Teotia, the exporters were told that the “issues pertaining to transaction cost will also be taken care of soon to ensure that Indian products remain competitive in the global market,” the official added.
Reeling under sliding exports due to slow global demand, sharp fall in crude prices, fall in commodity prices such as gold and copper, currency fluctuations, including depreciation of euro, rouble, Brazilian real and yuan, and the slowdown in Chinese economy, exporters have been urging the government for some time now to release the interest subvention allocated in the Budget.
The outlay for the interest subvention has been raised from Rs 1,650 crore provided in the Budget to Rs 2,200 for the current fiscal. Last year exports stood at $310.53 billion while imports were at $447.540 billion.
The commerce ministry aims to take goods and services export to $900 billion by 2020 and increase India’s share in world exports to 3.5 per cent from 2 per cent.
Assuring the exporters of making interest subvention available soon, the government has, however, asked them to “become more competitive as it has a limited role to play in increasing exports”.
The Federation of Indian Export Organisations (Fieo) has identified 36 products including bovine meat, cashew nuts, maize, sesamum seeds, granite, benzene, P-Xylene, vaccines for human medicines, reactive dyes and preparations thereof, insecticides, polyproylene and textured yarn of polyesters among others to boost overall exports.
According to Fieo, these 36 products showed a compounded annual growth rate (CAGR) of 21 per cent in India’s exports during 2010-14 as against overall exports CAGR of 9.56 per cent. The CAGR of world’s imports for such products was 16.63 per cent in the same period as against CAGR of overall global imports of 5.3 per cent in the same period.
The total export of these 36 products from India in 2014 was $45.58 billion, close to 14 per cent of our overall exports. The world imports for these 36 products in 2014 stood at $700.45 billion.
India’s share in world exports for these 36 products was thus 6.5 per cent in 2014 as against our overall share of about 1.7 per cent in the world merchandise exports,” the export organisation said as it made case for supporting these sectors to boost exports.
It said that if the country is able to increase its share from 6.5 per cent to 10 per cent in the next three years, exports from these sectors can go up to over $110 billion from the current $45.58 billion.
Exporters from the leather industry said that the government needs to set up a marketing fund for aggressively marketing Indian products in markets like China, which have huge demand for leather products. The sector has already started witnessing job losses, M Rafeeque Ahmed, chairman, Council for Leather Exports, said.
The commerce ministry has as such been asking for cost of capital for exporters, increase in EXIM Bank’s capacity for project exports and restoration of tax benefits to special economic zones to provide cushion to exporters.