Exporters demand government intervention to help arrest fall in shipments

With the preliminary data for September showing a fall of 3.5 per cent in India’s overseas shipment of goods, exporters have the government help them get cheap loans and also extend the GST exemption on freight.

Representatives from export organisations, who met Commerce and Industry Minister Piyush Goyal Friday, said the increase in repo rate will have its bearing on the base rate of banks and consequent to lending rates for export credit.

The base rate of State Bank of India prior to increase was 8.7 per cent which is likely to go to 9.4 per cent after increase in the repo rate.

“The base rate of many banks will be much above the base rate of SBI pushing the export credit rate in Rupee,” premier exporters body FIEO said in its representation to the minister.

Read | India's exports dip by 3.52% to $32.62 billion in September

It urged the Reserve Bank of India to introduce an export refinance facility to banks.

Under such a facility, the value of credit provided to the export sector in rupee can be refinanced by the RBI to banks at which it lends to banks.

“Such a measure will be extremely beneficial for our small exporters as the interest rates in many competing countries are much lower than in India and the double whammy is the loss on account of exchange rate as Indian Rupee remains one of the comparatively strong currencies globally,” FIEO said.

The Engineering export promotion body EEPC suggested that interest equalisation rate should be brought back to 5 per cent in place of the existing 3 per cent. Exporters get subsidy under the interest equalisation scheme for pre and post shipment rupee export credit.

Exporters also suggested that better market access provided by the government should be backed by an aggressive marketing strategy.