RBI urged to consider opening export credit refinance facility
FIEO President Dr A. Sakthivel has called for more liquidity at competitive cost for the export sector which reported 10.24% growth in September shipments.
Commenting on the latest monthly export numbers, he has also urged RBI to consider opening export credit refinance facility to banks so as to encourage them to lend to the export sector with refinancing from RBI at the latest Repo Rate.
Since the interest rates have moved upward and are now more than the pre-Covid level, there is a strong case to restore the Interest Equalization support to 5% and 3%, respectively, as existed prior to the Covid period, he pointed out.
Moreover, the Government should look into the export sector’s request for continuing with IGST exemption on freight on exports, which lapsed on 30 September 2022, particularly as the freight rates are still at much elevated level and GST on such freight will affect the liquidity of the exporters, though refundable later.
Dr Sakthivel also noted a decline in imports, calling it “encouraging despite the huge jump in import of coal and transport equipment.
“We hope that the energy prices will come down further providing more relief to us on the trade deficit.”
Reacting to the September Trade Data, Dr A Sakthivel said that goods exports during the month further consolidates on the back of 17 major product export categories including petroleum products, electronic goods, gems & jewellery, drugs & pharmaceuticals, organic & inorganic chemicals and agri products showing progressive growth trend.
The growth in exports of electronic goods on a sustained basis is a good sign besides growth in exports of gems & jewellery and petroleum products, said FIEO President, adding that it is very early to forecast anything as of now.
India’s overall September exports (Merchandise and Services combined) are estimated at US$61.1 billion, a growth of 10.24% over the same month a year ago.
Overall imports in September 2022 are estimated at US$76.26 billion, a growth of 10.73% over the same period last year. fiinews.com
