Report on exporters' transaction costs soon .

The Indian government is looking at ways to simplify procedures and reduce transaction costs for the country's growing exporting community and a task force will submit its report on the issue by June-end, Minister of State for Commerce and Industry Jyotiraditya Scindia said here Tuesday.

'We want our exporters to compete globally and for this it is essential to simplify procedures and reduce the transaction costs. It is not just about transportation nor financial costs, we are looking at simplifying the procedures and making things transparent for the exporting community,' he told reporters here on the sidelines of an event organised by industry lobby, Federation of Indian Chambers of Commerce and Industry (FICCI).

'The task force was set up in October 2009 and it is being headed by me. It looked at transaction costs incurred by exporters ex-factory to the f.o.b (freight on board) stage. The effort is to identify the areas which could be zeroed in on to simplify procedures and make the processes transparent. We expect to come out with the report by June-end,' he added.

The costs in India are almost double that in China and Malaysia. 'We are aware of the costs incurred by exporters vis-a-vis other nations,' he said.

In India it takes 17 days to transport a container at a cost of $ 945, while the time taken in Brazil is four days, Denmark five days, and Mexico 14.

Scindia said a team will also visit Denmark, Singapore and Hong Kong to study their procedures. 'For the global benchmarking study, we will also send out a team to these places in 15-20 days. It is essential to understand what is happening there in the top economies in terms of processes and procedures .'

'We will also incorporate the recommendations of this team in the report,' he said.

Scindia said the task force has been able to monetise transaction costs worth $12-15 billion, which is around 7-10 percent of exports valued at $160-165 billion. 'Even if we are able to work on and reduce up to 30 percent of these costs, we will be rendering a huge benefit to the exporting community,' he said.

The commerce ministry will work closely with ministries of finance, agriculture, shipping, and environment for execution of its strategy.

'I will personally pursue with the ministries concerned as execution is the key to delivering benefit to the exporters.'

Federation of Indian Export Organisations (FIEO) director general Ajay Sahai said the simplified procedures and reduced costs will not only benefit the economy but will also lead to a direct economic gain of at least $5 billion to exporters.

Source : Sify.com