The Hindu Business Line : Higher value addition must to increase exports, says DGFT

THE Indian economy has to grow at 12 per cent per annum in dollar terms, if the country has to achieve its target of cornering one per cent of the world trade by 2007, according to Mr L. Mansingh, Director General of Foreign Trade.

Addressing an `Exporters meet' here on Thursday, Mr Mansingh said that at present the country's one-year exports of about $53 billion was equivalent to one-month's exports of China, which accounts for 3 per cent to 3.5 per cent of the world trade.

The meeting, jointly organised by the Federation of Indian Export Organisations (FIEO) and Gitam Institute of Foreign Trade, Visakhapatnam, would discuss changes announced by the Union Government in the mini-Exim Policy pronouncement on January 31, 2004.

Mr Mansingh said, "The distinction between export and the domestic markets would vanish soon, as we have to compete with global products even in the domestic market."

The domestic industry also could not seek protection citing that imported products were of inferior quality because there were no mandatory quality parameters for most of the Indian products. So far, only 160 Indian products have quality parameters.

To enhance exports, he said, "We should go in for higher value addition. Besides, the State governments should also take the initiative to increase exports."

Stating Libya and Iraq today offer good opportunities for construction companies, Mr Mansingh said that the major construction companies of Andhra Pradesh could utilise this opportunity.

The FIEO President, Mr Rafeeque Ahmed, who presented the draft export policy for Andhra Pradesh to Mr Mansingh, said that the Southern Region of FIEO has also prepared draft export policies for Karnataka, Kerala, Tamil Nadu, and Pondicherry.

Apart from Karnataka, which had adopted most of these inputs and recommendations, Mr Ahmed said that Kerala and Pondicherry were actively preparing their export policies, while the Tamil Nadu Government had set up a core committee to draw a final export policy. FIEO was also a member of this core committee.

The Director of Gitam Institute of Foreign Trade, Prof. C.S. Venkata Ratnam, said that exporters needed an enabling infrastructure, quality packaging and management of export risk.

Mr R.J. Vaidyanathan, Andhra Bank's General Manager - Credit, said that it was becoming increasingly difficult to get line of export credit from foreign banks as they were asking higher processing fee and interest spread. For instance, for $5-million line of credit, foreign banks were asking $20,000 to $25,000 as processing fee plus a higher interest spread. In this context, Indian banks having foreign branches were in a better position to offer export credit to Indian exporters.

The President of the Association of Export Oriented Units (Andhra Pradesh), Mr Sudhir Sanghi, wanted the DGFT to look into the aspect of banks charging high interest on credit extended to exporters.

Mr S.C. Chowdhary, Visakhapatnam Commissioner of Customs, said that the Customs Department along with DGFT and Visakhapatnam Port Trust was holding road shows to market Visakhapatnam port.