Days after merchandise exports recorded contraction in September, commerce and industry minister Piyush Goyal has convened a meeting on October 7 with various export promotion councils to brainstorm ways for boosting outbound shipments, trade sources told FE.
Exports shrank 3.5% in September to $32.6 billion, the first such monthly drop since November 2020, according to the preliminary trade data released by the commerce ministry. While exports in the first half of this fiscal still recorded xx% increase from a year before, the slowdown in the order flow from recession-hit US and the EU has threatened to weigh down this growth in the remaining months of this fiscal. As such, the government is likely to set a goods exports target of $470 billion for this fiscal, against a record $422 billion in FY22.
Deliberations on potential benefits for trade settlement with Russia and others in rupee will likely be a key feature of the meeting. Besides, critical issues, including industry demands for scrapping of goods and services tax on export freight, removal of export duties on items like select steel products, further flow of credit into the export sector and increase in interest subvention are likely to feature prominently in the discussion, said one of the sources.
The Reserve Bank of India in July notified the new mechanism to settle international trade in rupees to reduce the depreciation of the rupee against the dollar. Already, Uco Bank and Yes Bank have firmed up arrangements with Russian banks under this mechanism, and more banks are supposed to follow suit. Once this payment system is fully operationalised, it may ease exporters’ concerns about payments getting stuck.