Exporters seek cheaper credit, more incentives

Our Bureau New Delhi | Updated on April 09, 2020

Units hit by cancellation of orders, says FIEO in a letter to PM

Exporters’ body, the Federation of Indian Export Organisations (FIEO), has turned to Prime Minister Narendra Modi for financial help, including cheaper credit and increased incentives, to support distressed units facing cancellation of more than 50 per cent of orders due to Covid-19 disruptions worldwide.

FIEO President Sharad Saraf, in his letter to the Prime Minister on Thursday, said: “The worst-hit are the lifestyle products like leather, carpets, handicrafts and apparels which have over 75 per cent cancellations…We request immediate help through rapid policy decisions to mitigate the crisis and prevent further structural damage to both industry and economy.”

Exporters made a case for interest-free working capital term loan and allotment of ₹30,000 crore to exporting companies to ease working capital liquidity issues. The loan amount should cover six months’ gross salary and wages, rent and electricity charges and should not involve additional collateral or paperwork.

For labour-intensive units under immense pressure to pay wages in the absence of production, FIEO has proposed a three-month waiver on EPF and ESIC payment.

FIEO further proposed that on the lines of China, which has already provided 3 per cent additional export tax rebate on exports in March, all exporters should be given additional 2 per cent under the Merchandise Export from India Scheme (MEIS). Labour-intensive sectors should be provided additional 4 per cent MEIS on exports up to March 31, 2021.

India's exports in the April-February 2019-20 period was 1.5 per cent lower to $292.91 billion, although in February this year, it was marginally higher than the same month last year.

Published on April 09, 2020

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