FIEO wants govt to ease regulations to build capacities for increased exports to US, China

Indian exporters want the government to ease regulatory norms in order to help them build capacities to gain from the on-going trade war between China and the US.

“The government has asked us for inputs on how to increase exports to China and the US given the fact that the two have imposed high tariffs on each other’s products creating opportunities for third country imports. There is a meeting scheduled on Wednesday on the issue. We strongly feel that India is in a position to exploit the opportunity but capacity constraint is the biggest bottleneck,” said Sharad Kumar Saraf, President, Federation of Indian Export Organisations (FIEO).

The Federation, which will give its recommendations to the government based on its interaction with its members, would bring to the government’s attention the need for fast allocation of land for export units and time-bound grant of permits and licences.

The meeting between exporters and the Commerce Ministry on Wednesday is likely to be attended by Commerce & Industry Minister Piyush Goyal and Minister of State for Commerce Hardeep Puri.

Land allocation

“We will ask the government to come up with schemes which will enable immediate allocation of land for setting up export units without legal complexities. Additionally, we would suggest that any factory exporting at least 60 per cent of its products should be recognised as an export-intensive unit and should be given licences and permits in a time-bound manner,” said Saraf.

Saraf said that he and many of his fellow exporters had already started getting queries from the American market but could not take the new orders because of their limited capacities.

Till now, the US has imposed tariffs on $250 billion worth of Chinese products, and has threatened tariffs on $325 billion more of exports. In retaliation, China has imposed tariffs on $110 billion worth of US exports.

In a recent study, the Commerce Ministry identified 203 products where India’s exports could be increased to the US, replacing Chinese goods, and 151 items where exports to China could rise.

Alicia García Herrero, Chief Economist for the Asia Pacific for Natixis, a French financial services firm, also believes that Asian economies, including India, could benefit from the US-China trade war in the mid-term but they have to build their capacities.

“Short-term winners might be some European sectors, especially in the auto/aerospace and Japan’s semiconductor industry. In the medium-run, emerging Asia could benefit from the offshoring of value chain away from China….,” she said while speaking to journalists a recent interaction organised by the National Press Foundation in Hong Kong.

As per an analysis done by Natixis, India is ranked second amongst Asian countries likely to gain in labour- intensive products while it is placed sixth for medium tech capital-intensive products.