Govt examining ways to trim transaction costs for exporters

The government today said it is examining ways to reduce transaction costs for exporters to enable them compete better in the tough global markets.

A task force headed by minister of state for commerce and industry Jyotiraditya Scindia is expected to submit its report by June-end.

Simplification of procedures and transparency issues need to be addressed. Cost arising out of inefficiencies in the process can be avoided, Scindia said at a Ficci function here today. He further said the transaction cost estimated to be $12-15 billion by the task force, works out to 7-8 per cent of total export value.

"Even if we are able to work on and reduce up to 30 per cent of these costs, we will be rendering a huge benefit to the exporting community," he said.

The cost in India is almost double than in China and Malaysia. He said members of the group would soon visit Denmark and Singapore to study their procedures.

The commerce ministry will work closely with other ministries of finance, agriculture, shipping, textiles and environment for execution of its strategy, he said.

The country's exports grew by 34.8 per cent to $16.09 billion in February compared to a year ago period. Exporters face aggressive competition from China and other developing countries for their pie of the developed markets.