The editorial, “Favourable trade winds” (October 16), highlights export trends that are expected to bring cheer. The trends are expected to continue with a favourable global trade situation, locally easing goods and services tax (GST) woes and reduction in oil prices. This apart, value-added tax exemptions by some states are expected to reduce the cost of exports and give them the much needed competitive edge.
There is still space to fill, with easy export norms and procedures to take exports further ahead. One could be doing away with quantitative caps on export products, especially agro products, besides reviewing free trade agreements (FTA) where gold imports are permitted with duty exemptions. The current account deficit (CAD) could be narrowed down further if gold imports from FTA-concluded countries are minimised to remove this item from FTAs altogether.
High-volume and high-value gold imports are widening the gap between exports and imports, causing harm to the country’s CAD numbers. Although some steps were taken by the commerce ministry, more regulations are needed. The commerce minister should look into this aspect now.
Export figures for labour-intensive sectors such as those producing fruits, vegetables and handicrafts are dismal. Exports of fruits and vegetables are down because of tightened norms on the import of these products in countries such as Oman and Saudi Arabia.
The Export Promotion Council for Handicrafts blamed GST woes mainly for the slowdown in exports in the last 100 days. Now that GST hurdles have been removed, handicraft exporters can focus on efforts to push their exports up.
An important issue the commerce minister should address is how to make export financing easy. A few months ago, the Export Credit Guarantee Corporation of India had restored letter of credit factoring by earmarking around Rs 60 crore to grant credit against LC factoring to exporters. But this amount is too small to meet credit requirements. It is time the facility is extended to all exporters and the amount increased. This would help exports grow as this will likely facilitate working capital requirement of this class of exporters.
Amara Sathya via email
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