The oil export puzzle explored by A K Bhattacharya (April 16) is timely. The commerce ministry should act swiftly taking into cognizance the current situation on account of rising oil prices, trade wars and a depreciating rupee. While the export trends are encouraging, its sustainability is doubtful. The rupee will continue to slide further in the days to come because of the current trade war between the US and China and the fear of other countries joining the war zone soon with their tit-for-tat tariff measures. Meanwhile, rising oil prices will widen the current account deficit and will have a direct bearing on exports. However, the commerce ministry can turn this situation into a blessing in disguise.
The depreciating rupee can bring in higher value realisation of export proceeds; banks should be instructed to clear all export bills and issue BRCs (bank realisation certificates) quickly. A review of customs levies on import dependent raw materials for exportable products can also help higher export realisations where lower raw material import meant for export production could play a vital role to face the global competition. Out of bound shipments should be given top priority in customs clearance. The recent initiative of Market Development Mission (MDM) that is awaiting cabinet nod should be expedited.
As pointed out by the commerce minister recently, service sector exports could be a vital area that needs to be pushed up with identified 12 champion services where foreign exchange can be earned by providing these selected and highly potential services. The Chinese tariff barriers on US soya bean imports should also act as a blessing in disguise for Indian exports. The government should come out with higher incentives for exports of soya bean and make it competitive with the Chinese produce. All these measures can help to increase exports and tide over the current situation.