Extend interest subsidy to textile, leather: FIEO

The Federation of Indian Export Organisations (FIEO) today urged Finance Minister Pranab Mukherjee to reconsider the Budget proposal of excluding some sectors like textile and leather from the ambit of concessional export credit.

The exporters body said that these sectors (garments, leather, gems and jewellery and marine sectors) are still expecting growth to contract in FY10.

"Many of these sectors are still expecting negative growth in 2009-2010...Few of them may have shown positive growth but that too on a very low base," FIEO President A Sakthivel said in his letter to the Finance and Commerce Ministers.

These sectors are highly employment intensive, he added.

"...The government should continue to provide them interest subvention both with a view to promote export as well as to encourage additional employment in these sectors," he said.

Sakthivel added that the export sector is still facing demand compression coupled with price war on account of aggressive prices being offered by the other competing countries benefiting from huge stimulus provided to them.

Mukherjee in the Budget announcement extended interest subsidy of 2 per cent for one more year till March 2011 for exports covering handicrafts, carpets, handlooms and small and medium enterprises.

The list, however, did not included sectors like garments, leather, gems and jewellery and marine sectors which are currently enjoying these benefits.

After falling for 13 consecutive months since October 2008, exports turned positive in November 2009. The exports grew 18.2 per cent in November and 9.3 per cent in December and 11.5 per cent in January.