The Federation of Indian Export Organisations (FIEO) has asked the central government to announce a special scheme for goods exported by micro small and medium enterprises (MSMEs) to boost exports. The request has come at a time when Indian exports are falling due to external challenges like economic slowdown and rising inflation in most economies across the globe.
FIEO says the announcement of an export development fund with a corpus of ₹5000 crore for aggressive overseas marketing by MSMEs can go a long way in showcasing Indian products globally. MSME exports account for almost 50% of total merchandise exports from India. “A sizeable budgetary support for the District as an Export Hub scheme to bridge the supply side gaps can support exports at the district level too,” A Sakthivel, president, FIEO, says.
Responding to December 2022 trade data, Sakthivel says the decline in merchandise exports is a reflection of the toughening global trade conditions on account of high inventories, economies entering recession, high volatility in currencies and geopolitical tensions. “The drop in commodity prices and restriction on some exports, with a view to stem the price increase in the domestic market, has affected the growth numbers. Flight of capital from the market has also impacted the growth process. The coming months would be quite challenging unless both global economic growth and geopolitical situation improves drastically,” Sakthivel says.
FIEO wanted the government to focus on providing easy liquidity at competitive cost. The organisation also sought an extension of the Emergency Credit Line Guarantee Scheme (ECLGS) for one more year (till 31 March 2024) by suitably enhancing the moratorium period. Restoration of the Interest Equalisation support to 5% and 3% respectively, Integrated Goods and Services Tax (IGST) exemption on freight on exports (which lapsed on September 30), extension of tenure of Pre-shipment Credit in Foreign Currency (PCFC) from 180 days to 365 days and notification of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme rates for the holders of Advance Authorization, Duty Free Import Authorisation (DFIA) and export oriented units (EOU) were the other suggestions made by FIEO to support export growth.
The organisation has requested the government to consider reduction of import duty on certain key raw materials as part of the Budget announcement.
Source : fortuneindia