The Commerce Ministry today said it will focus on six areas, including reviving SEZs and according priority sector status to export credit, with a view to giving a boost to overseas shipments, which have been on a decline since December 2014.
The other focus areas are MSMEs, promoting organic produce; involving missions and embassies to promote trade and removing issues of EXIM Bank and Export Credit Guarantee Corporation (ECGC).
These issues, among several others, were discussed during the first meeting of reconstituted 70-member Board of Trade.
Commerce and Industry Minister Nirmala Sitharaman, who chaired the meeting, said the government is committed to providing all the support to exporters to boost outbound shipments. "We are going to hand hold sectors that need help," she said, adding that "we will be working on these areas in the next few days".
On special economic zones (SEZs), she said the ministry would work on improving the potential of these zones as they are sitting on huge land bank.
"We will meet with different line ministries. We will call up a SEZ specific focus meeting with departments, including economic affairs and CBEC, and industry experts," Sitharaman said.
She said as suggested by ICICI Bank MD Chanda Kochhar, the ministry will take up the issue of according priority sector status to export credit with the Finance Ministry as it would help in promoting exports.
She said the ministry would also discuss with the RBI and the Finance Ministry about the issues being faced by EXIM Bank regarding more financial flexibilities.
"We will hold interactions with Indian High Commissions and Embassies along with their commercial and economic wings in order to make them more vibrant and understand requirements of exporters," she told reporters after the meeting.
The minister said that the government always give special attention to MSMEs as they contribute significantly in the exports besides the ministry will focus on promoting exports of organic produce.
During the meeting industry raised the issue of minimum alternate tax and dividend distribution tax on SEZs; problems in getting credit for MSMEs and extending line of credit to boost exports.
Industry leaders who attended the meeting include Kochhar, Biocon MD Kiran Majumdar-Shaw, Dr Reddy's MD Satish Reddy and TVS Motor Company Chairman Venu Srinivasan.
Falling for the 15th month in a row, exports dipped 5.66 per cent in February to USD 20.73 billion due to contraction in shipments of petroleum and engineering goods amid tepid global demand.
During the three-hour long meeting, exporters body FIEO
suggested that investment-linked tax benefits particularly to the MSMEs should be provided to boost production and exports.
FIEO President S C Ralhan also said that many of the exporters have received payment in US Dollar for exports to Iran which could not materialised as RBI is yet to issue instruction for settlement of trade transactions.
"The delay is costing exporters and in few cases the payment in foreign exchange has to be remitted back in view of absence of guideline by RBI," he said.
CII President Naushad Forbes said that India's exports are highly dependent on primary goods and labour intensive low value added manufactured goods and its share in high value added is very less.
"India needs to match its exports with the composition of global trade. We need to invest in R&D and adopt technologies to diversify," he said adding higher participation of states are required for trade facilitation, reform of standards regime and more value addition in production cycle.
He also called for diversification of services exports and reforming the standards regime in India.
Expressing concern over falling exports, Gem Jewellery Export Promotion Council (GJEPC) Chairman Praveenshankar Pandya in the meeting said that the country's overall gems and jewellery exports are likely to drop by 16 per cent in 2015-16 fiscal for the first time in last 40 years.
"We suggested to the government that we can offset this decrease in exports by getting business from other countries. And for which, we need an environment of easy of doing business here," he said.
Many diamond players are not keen to come to India for manufacturing due to high taxes. "They find taxes in India are not at par with Belgium or other diamond centres like Israel. All the daimond centres have presumptive tax but it is not there in India and hence they don't come," he added.
The GJEPC chief also informed the government that India can boost gold jewellery exports by enhancing domestic skills at par with international level and inviting global players to invest in India for manufacturing of fine jewellery.
Of the world's jewellery production of USD 80 billion, India's share is only USD 11 billion and there is potential to increase this, he added.
