NEW DELHI, Nov 27: Minister of State for Finance Bhagwat Kishanrao Karad has announced the formation of various groups to address the problems raised by exporters and group on the challenges of e-commerce retail exports which will comprise stakeholders from Federation of Indian Export Organisations, leading banks, Indian Banking Association, Ministry of Commerce and Ministry of Finance.
Responding to the issues raised by FIEO at a banking conclave on exports, Karad pointed out several banking sector reforms undertaken in the recent past which have been implemented in a successful manner.
The Government has also supported trade with the extension of Emergency Credit Line Guarantee Scheme (ECLGS) and expressed willingness for meetings to understand the challenges faced by exporters.
The export promotion body has sought Government intervention on important challenges with respect to increasing demand for exports credit, pre-shipment credit on export order/LC, continuation of interest equalization scheme, restrictions on opening of current account, challenges for e-commerce exporters, third party/third country payment, Iran and OFAC countries and schemes like ‘Niryat Rin Vikas Yojna’. Ajay Sahai, Director General and Chief Executive Officer, FIEO, drew attention to problems of collateral, post-shipment advance against GST receivables in addition to duty drawback entitlement, high charges on ACU transactions and high transaction charges in e-commerce shipment.
There are also challenges related to merchanting trade transactions (MTT) wherein the RBI’s clause of being MTT in line with the prevailing foreign trade policy is a constraint. The export promotion body is looking at more proactive support from banks to close the gap between the current exports and the set targets.
“Most of the banks have already taken appropriate steps to ensure that the speed of the working capital cycle of exporters can be increased through extending timely and sufficient working capital requirements,” said Atul Kumar Goel, MD and CEO, UCO Bank and Chairman, IBA.
He assured exporters that transactions related to Iran are being seamlessly handled by the UCO Bank, and the banking sector as a whole has been trying its best to smoothen the processes. (UNI)
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