Money & Banking

‘IDB membership can help project exporters penetrate LAC market’

K.R.Srivats New Delhi | Updated on December 09, 2019 Published on December 09, 2019

The Export Import Bank of India (Exim Bank) has urged the the government to consider taking membership in Inter-American Development Bank (IDB). This could provide opportunities for Indian project exporters to penetrate the Latin American and Caribbean (LAC) market for project exports, David Rasquinha, Managing Director, Exim Bank told BusinessLine.

Economic benefits

“Indian government could consider taking up membership in the IDB on account of the considerable geopolitical as well as economic benefits for India”, Rasquinha said, adding that this recommendation forms part of a new research study brought out by Exim Bank.

Export of engineering goods on deferred payment terms and execution of turnkey projects and civil construction contracts abroad are collectively referred to as ‘project exports’.

With growing impetus to infrastructure projects across most developing countries and multilateral financial institutions scaling up their investments across segments, the scale of opportunities in project exports is large and growing, according to Rasquinha.

To push project exports, the Exim Bank has also recommended that IRDAI accord special dispensation to Export Credit Guarantee Corporation of India Ltd for providing cover in foreign currency under Buyers Credit under National Export Insurance Account. A survey of select project exporters in India by Exim Bank revealed that companies had reported securing contracts valued at nearly $17.7 billion for FY16-18. West Asia is among the top destinations for project exports from India, with UAE and Qatar taking the top two slots.

Rasquinha also said that Exim Bank is of the view that Indian contractors should also be encouraged to adopt a consortium approach for bidding and executing projects. Pooling of resources, complementary skills and the ability to draw upon the resources with a collaborative approach can help secure and execute a comprehensive range of projects spanning a wide range of sectors, he said.

Even within a sector, consortium approach can help pool capacities of exporters and help them bid for larger value contracts.

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Published on December 09, 2019
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