| Date: |
23-04-2015 |
| Subject: |
FIEO sees sharp drop in exports, seeks government support |
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NEW DELHI: The Federation of Indian Export Organisations has warned of a sharp fall in shipments from India in April and in the coming months, saying the sector needs immediate government intervention to reverse the negative trend.
"The figures that are coming in are very worrying," FIEO President SC Ralhan said, offering data from Container Corporation of India (Concor). "Exporters need oxygen to survive. We don't see exports reaching even last year's figures of $310 billion, unless some miracle happens."
According to the Concor data, container exports from Ludhiana in the first 15 days of April fell 26.83% over the year-ago period.
A sharp appreciation in rupee against key currencies such as Euro and Yen has not only put pressure on export margins but also market share, as counties with stable currencies such as China are able to competitively price their products compared with India, FIEO said.
The exporters' lobby has sought a meeting with Prime Minister Narendra Modi to stress on the need for expansion of government support in the form of tax incentives and export subsidies. This comes weeks after the announcement of the five-year foreign trade policy by the government.
Exports declined 21% in March, pulling down the total exports in 2014-15 by 1.23% to $310.53 billion.
"There has been a drop of about 50% in the orders that we are receiving now," Ralhan added.
FIEO has also sought immediate re-introduction of the interest subvention scheme for exporters, timely reimbursement of input taxes and restoration of the higher rates of export incentives for both merchandise and services to help exporters overcome the current crisis.
Ralhan said the marginal drop in key rates by RBI has not lowered the borrowing rates. "Thus, the government has to re-introduce interest subvention of 3% immediately with effect from April 1. The high cost of credit is hurting the micro and small companies," he said.
In a representation to the commerce secretary and the director-general of foreign trade, the exporters' lobby has asked for re-classification of tax incentive scheme for merchandise trade and inclusion of 70 more sectors in the scheme for services.
The government announced tax incentives under the Merchandise Exports from India Scheme and the Services Exports from India Scheme, which is in the form of fully transferable duty credit scrips with reward rates ranging between 2% and 5%. Exporters can use these scrips to offset service tax, excise duty or customs duty.
The slowdown in China's economy is a big worry for exporters, as it has both regional and global ramifications. Exporters also want a special package for the EU market, which is going through a turmoil.
Source : economictimes.indiatimes.com
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