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Uncooperative attitude of bankers hurting exports: FIEO

Press Trust of India  |  New Delhi 

Exporters body FIEO Thursday said the uncooperative attitude of state-owned bankers is hurting exports and it would not be possible to increase shipments without adequate credit support.

(FIEO) demanded quick resolution of credit issues to push the country's exports.

"PSU banks officials including MDs, EDs, GMs, AGMs are not accessible to exporters, particularly from the MSME sector. This has tightened the hands of these exporters to take orders as they are not able to discuss issues and challenges with regard to availability and cost of credit to the exports sector," he told reporters here.

He added that the efforts of Suresh Prabhu, who is taking several steps to promote exports, would not fructify if banks fail to lend adequate funds to exporters at affordable rates.

While the government is pushing the Digital initiative and paperless transactions, the banks are demanding bundles of documents, collateral and other papers for considering applications even for small loans, he said.

"It takes months and months to get these limits approved and in the meantime we lose our orders. The issue needs urgent attention of the government," Gupta added.

He said similar problems are being faced with regard to insurance body ECGC, which shows reluctance to extend to exporters.

"They reject claims on very flimsy grounds. I would urge the to look at the matter on an urgent basis. If banks and ECGC continue to behave like this, we would not be able to register double digit growth rate in exports," he said.

He also made a case for enhancement of duty drawback rates, inclusion of more products like fabrics under export promotion scheme MEIS and extension of the interest equalisation scheme to merchant exporters.

Only these measures can help in achieving USD 350 billion exports and recording substantial growth, he added.

Referring to the issues concerning trade with China, the FIEO said India's exports to grew by about 17 per cent in the first six months of 2018-19.

He further said a sharp decline in exports of copper, ores, minerals and zinc shows that India's exports are moving towards value added products.

On trade with Iran, he said India's exports to the country grew by about 22 per cent in the first six months of 2018-19.

However, the imposition of sanctions has definitely impacted India's shipments as the three-month window provided by the got over in August 2018, he said.

"We have been given to understand that UCO is working on necessary modalities to start the rupee payment. This should apply to all exports except those in OFAC list or those under sanctioned entities," he said.

Insurance and shipping remain a challenge for exports to as both European and US based companies are reluctant to take such business, he said.

Since most of the courier companies have also boycotted Iran, sending exports documents is also a challenge particularly with the unavailability of SWIFT, he said, adding Post should look into the opportunity to fill the gap.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 06 2018. 20:30 IST