The Federation of Indian Export Organisations (FIEO) has urged the gvernment to reduce the transaction cost on exports.
Delivering the keynote address at the exporters’ meet – jointly organised by the Karnataka Cashew Manufacturers’ Association (KCMA), FIEO and Visvesvaraya Trade Promotion Council – here on Wednesday, Walter D’Souza, Chairman of FIEO (Southern region), said one of the major concerns for the Indian exporters is the transaction cost.
The Indian exporters have a transaction cost of 10-12 per cent compared to a little less than 1 per cent in some of the developed countries, 1-3 per cent in most of the developed countries, and 6-9 per cent in most of the developing countries.
“This area needs to be addressed at the right earnest. If we are able to reduce our transaction cost by 6-9 per cent, it will give us $ 15-18 billion in terms of export earnings,” he said.
Stressing the need to develop infrastructure in hinterland, he said issues related to connectivity to hinterland should be resolved quickly.
D’Souza hoped that the country should be able to touch the exports to the order of $ 325 billion during the current financial year.
Speaking on the occasion, K Sudhakar Kamath, president of KCMA, said that the ‘outdated rules and regulations’ prevent the farmers from realizing better realization for their produce.
Urging the Government to bring down the Central Sales Tax to zero per cent, he said most of the times businesses have to deal with more than 40 government departments, many of which are either superfluous or redundant, on a regular basis without any direct benefits towards the growth.
HAC Prasad, Senior Economic Advisor (Additional Secretary), Union Ministry of Finance, said that the country’s aim should be to increase its share in world merchandise exports from 1.6 per cent in 2012 to at least 4 per cent in the next five years.
For this, the CAGR (compounded annual growth rate) of exports in next five years should be around 29-30 percent.
Stating that it is not an impossible task, he said the country had continuously shown above 20 per cent annual export growth from 2003-04 to 2007-08.