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Tuesday, Feb 03, 2004

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Recapture CIS markets, engineering exporters told

Our Bureau

Kolkata , Feb. 2

ENGINEERING exporters have been urged to take full advantage of the Market Access Initiative (MAI) scheme of the Commerce Ministry, whose scope has now been further expanded.

Exporters have been told that the Ministry was particularly keen to receive innovative proposals from trade, for recapturing the lost CIS markets, which enjoy a huge intra-CIS trade. The CIS countries now source some 66 per cent of their total imports of goods and services from other countries.

Making a presentation on `Export enhancement strategies for CIS countries' at an interactive session jointly organised by the Engineering Export Promotion Council (EEPC) and Shellac Export Promotion Council (SEPC) recently, Mr P.K. Mahapatra, Director, Ministry of Commerce, said as per the revised guidelines, a comprehensive package was now available for exporters, beginning with a market study, buyer-seller meets, product marketing, international exhibitions etc.

Blaming the lack of contact between the respective business houses after the break-up of the Soviet Union in 1991 for the disappearance of the CIS market for Indian exporters, he said full-fledged efforts must be made by engineering exporters to recoup the lost ground by making full use of the MAI, whose corpus for 2004-05 is now being raised to Rs 140 crore.

Admitting that getting reliable commercial data on Exim needs of the region was a major snag, he said even State Governments can now approach the Ministry for support under MAI scheme if they had viable stand-alone specific export projects in mind. While MDA (Market Development Assistance) is made available to individual exporters, MAI support is extended only to composite project-based schemes put forward by Export Promotion Councils/Commodity Boards with the help of inputs from member-exporters.

Responding to the plea for setting up an EEPC office in one of the CIS countries, the official said the proposal would be put forward for consideration. He said trade with CIS region in 2002-03 was still less than what it was during 1990-91.

Commenting on steps to increase trade with the Russian Federation under the Re-Rouble trade arrangement, Mr Mohapatra said whatever amount was left was now being allowed for use in joint ventures. He envisaged a major role here for the Russian banks, which were keen to work with the Indian banks. Even an escrow arrangement for dealing with a Kazakstan bank has been discussed by an Indian party for a joint venture. Pointing out that some 40 per cent of the trade with Russia was now through commercial channels, he said there was an urgent need to increase the business-to-business relationships, to make a good beginning. Stating that Indian products simply do not reach these markets, he urged the export trade to chalk out suitable strategies for market penetration.

In his keynote address, Mr G.D. Shah, former Chairman of EEPC, and an expert on Indo-CIS trade, sought support of the Ministry for tackling the specific problems of engineering exporters, especially in the context of sharply rising steel and pig iron prices (by almost 60 cent) in the recent past. He also stressed on the urgent need to preserve the basic raw materials for engineering exports, as done by other countries like China, which has stopped export of coking coal. In the context of CIS, he suggested that exporters should concentrate on a select list of countries to get maximum benefits.

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