Two months after the coronavirus started decimating the global economy, exporters have urgently demanded extension of all export promotion schemes, relaxed non-performing asset (NPAs) norms, and faster, easier credit disbursement by banks.
In their communication to the finance and commerce ministries, the Federation of Indian Export Organisations (FIEO) has said near a lockdown and quarantine in many advanced economies has given a jolt to demand for Indian goods. With recession looming in many countries, exporters fear major cancellation of orders as buyers ask to hold back shipments till further instructions, said Sharad Kumar Saraf, President, FIEO.
“Even in cases where Indian exporters are adhering to the terms of contract, the force majeure clause is likely to be invoked by buyers to deny claim/liability raised by exporter," he said.
FIEO has requested the government to ensure that banks delay the declaring of companies’ accounts as NPAs for one year as the lack of business coupled with business expenses remaining fixed will make many accounts NPAs. It also wants existing working credit limits of exporters with the banks to be automatically enhanced by 25 per cent. Collateral free lending up to Rs 2 crore with the collateral requirement capped at 35-40 per cent for lending beyond Rs 2 crore, also feature in the list of demands.