The Hindu Business Line : Exporters to meet Commerce Secy over slowdown

THE Federation of Indian Export Organisations (FIEO) has convened a meeting of the heads of various export promotion councils to hammer out a strategy to counter the slow down in exports.

The meeting is to take place on Wednesday in New Delhi. Soon after the meeting is over (in the forenoon), the exporters will meet the Commerce Secretary to give him their demands and suggestions. FIEO has also invited two non-exporters to the meeting — an expert from the Indian Institute of Foreign Trade and an ex-RBI official. The former will give an outline of the global trade scenario, the latter will give a perspective of `what the RBI can do and cannot do', to help exporters. The meeting will help evolve a strategy, which could be presented to the Government.

"I am very concerned about the insensitivity of the Government about the exporters' (cause)," the FIEO President, Mr Rafeeque Ahmed, told Business Line on Sunday.

He said the slowdown in exports had gained very worrisome proportions, with growth in August falling below 5 per cent. The main reason for this is the 5.8 per cent appreciation of the Indian rupee against the dollar since January. (Another reason is that the current year's growth is on a larger base.)

"Such a decline in exports would result in a cascading adverse impact on domestic scenario in terms of rising unemployment, reduction in levels of existing salaries and incentives in labour," a note on `appreciation of rupee' prepared by FIEO says.

In a recent letter to the President of India, FIEO has made three specific suggestions to help exporters: (a) make credit available in foreign exchange out of RBI's reserves to exporters at a rate of Libor + 0.75 basis points; (b) tell banks to give preference to exporters in disbursing FCNR (B) loans and (c) make available the duty-free import licence on incremental export turnover applicable from the current year itself.

The third point is something that FIEO has been asking right from the time the Exim policy was announced. The new provision allows exporters to get a duty-free licence next year for a percentage of their current year incremental export turnover, subject to certain conditions. FIEO wants the licence to be given in the current year itself on last year's incremental export turnover, subject to the same conditions.

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