Commerce and Industry Minister Suresh Prabhu has made a case for banks allowing a greater flow of credit to the export sector.
Highlighting the declining trend of export credit in recent months, Prabhu argued that Micro, Small and Medium Enterprises (MSME) needed more funds. This would be crucial towards employment generation.
Prabhu presided over a meeting of government officials and export organisations on Wednesday to discuss problems faced by the export sector. Apart from the Minister of State for Finance, senior officers from the Department of Finance, Revenue, Commerce and the Directorate General of Foreign Trade (DGFT) were present.
He also urged Revenue Department officials to make Input Tax Credit (ITC) refund online to ensure that the export refund is seamless, and also transparent and accountable.
Representatives of the export sector highlighted the problems of pre-import under advance authorisation and requested the Commerce Minister to delete the condition retrospectively. Suresh Prabhu asked DGFT and Department of Revenue, Ministry of Finance to look into it so that genuine exporters are not harassed.
Banking issues such as caution-listing of exporters, third party/ third country exports and list of items to be traded with Iran were also deliberated and the Department of Financial Services, Finance Ministry agreed to discuss such issues with banks in the meeting scheduled on 22nd January 2019.
However, industry representatives acknowledged the support provided by the government's decision to extend Interest Equalisation Scheme to merchant exporters, which is expected to boost export capabilities of MSME units.