The Federation of Indian Export Organisations (FIEO) has said that outlook for exports is very bright. “But frequent increases in interest hikes could be a dampener. This will deny Indian exporters a level playing field in the international market,” Mr Walter D'Souza, Regional Chairman (South) of FIEO, told Business Line .

The rates had gone up by 71 per cent from 7 per cent in March 2010 to 12. 5 per cent at present. Compare this with 1 per cent in the US, 2-3 per cent in Europe and 6 per cent in China, he said.

Mr D'Souza was here to take part in Open House organised by the Federation on Customs, Excise, Service and Goods and Service Tax on Tuesday.

Exporters were at a loss when interest rates were increased midway. “They do not factor in these unscheduled hikes when they sign deals. This pinches. Rate hike is one of the many tools to rein in inflation. That is not the only tool,” he said.

He said expenditure had gone up significantly. For one, wages have gone up 30 per cent on an average. Transactional costs have gone up by 10-12 per cent as against the global norm of 5-6 per cent. Lack of infrastructure was adding to this.

Asked about the outlook for export sector, he said that outlook was bright. “Acceptability of Indian goods and services has gone up significantly. Up to now, we used to be known as exporter of raw material. Now this has changed,” he said.

Asian market

Asia could be a promising geography for Indian exporters. “We could access the African market through the Gulf region. We have set up a facilitation centre in Sharjah and it has begun to yield results,” he said.

Pakistan, with a lot of Indian Diaspora, too promises to be a good export opportunity. “Small and medium enterprises and tiny industry would be benefited if we could open up this market,” Mr D'Souza said.

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