The Hindu Business Line : `Govt keen to pare transaction costs of exporters'

THE Director General of Foreign Trade (DGFT), Mr L. Mansingh, has conceded that the transaction cost in exports is a matter of concern and the Government had been taking all-out measures to reduce the same so as to achieve one per cent share in the global trade.

Speaking at an interactive session on Exim Policy and Customs organised by the Federation of Indian Export Organisation (FIEO) and Export Promotion Council for Handicrafts (EPVH) in Moradabad last evening, Mr Mansingh said that the Government had been trying to ensure that the transaction cost to exporters was kept at the minimum.

He said that old rules were being overhauled and fine-tuned while better coordination was being ensured among all agencies concerned.

The FIEO President, Mr M. Rafeeque Ahmed, said the continuing appreciation of the rupee against the dollar was not only eroding India's competitiveness but also greatly narrowing the margin of exporters' profit.

``With the thinning of profit margins, exporters may not find it worthwhile to take the trouble of selling their products abroad as most of the incentives have been taken away, with the major one— the exemption under Section 80 HHC— coming down drastically,'' he said urging the Government to make available pre and post-shipment credit in foreign exchange.

He sought a scheme to reimburse exporters the high transaction cost being borne by them if the Government could not drastically reduce the transaction cost owing to exchange rate fluctuations.

In his address, Mr Sat Pal, Ex-Chairman, EPCH, said the export of Indian handicrafts was Rs 8,343.41 crore in 2002-03 and the target of $1,950 million for 2003-04 fiscal has also been achieved.

He urged the Government to declare Moradabad as `town of excellence' for integrated development so that exports from Moradabad would be doubled within three years.