New Delhi: Exporters can be given incentives, but they must be justified, reasonable, and in line with global trade rules, Minister of Trade and Industry Piyush Goyal said on Wednesday. He interacted with representatives of various export promotion councils, including clothing, leather, gemstones and jewelry, pharmaceuticals and technology, through video conferencing.
The minister urged exporters to identify their strengths, potential and competitive advantages in certain sectors and to focus on using them in world markets.
In the post-COVID era, the global supply chain would change noticeably, and Indian industrialists and exporters should try to gain a significant share of world trade.
Goyal assured them that the government would be a proactive supporter and facilitator of their efforts, and Indian foreign missions can play an important role in this.
“Incentives can be given, but they have to be justified, reasonable and WTO-compliant,” he said.
Goyal also said the ministry is working to identify the specific sectors that can be advanced for export in the near future.
“India will have a Rabi crop this season and our warehouses are overcrowded. At the same time, there is news that there is a lack of food in several countries.
“Many places do not have food of adequate quality, taste and quantity due to supply chain disruptions due to the COVID-19 crisis,” he said, adding that this could be a good opportunity for agricultural and processed food exports.
The minister urged the councils to hold brainstorming sessions with their members and develop similar actionable ideas.
During the meeting, exporters raised various questions regarding banks, cash flow and incentive packages. Sharad Kumar Saraf, president of the Federation of Indian Export Organizations (FIEO), said banks will not pass on the benefits announced by RBI to exporters.
“Liquidity is a major problem for exporters. Without adequate cash flow, it will be difficult for production units to start operating. We asked the Minister of Commerce to hold a meeting with RBI on the subject,” he said.
He added that several developed and developing countries have launched a stimulus package and India should now launch one. He also said that several countries pay wages and salaries in the private sector in different ways. “The government should look at that too,” he added.
The Chairman of the Apparel Export Promotion Council (AEPC), A Sakthivel, raised the issue of the various options in the textile sector. He urged the government to lift the export ban on cotton and said “there is great demand for cotton in world markets”.
Exporters are demanding an incentive package from the government. The clothing exporters have asked the government to extend the interest rate subsidy system for all clothing exporters by at least two years and at a rate of 5 percent.
Sakthivel said that given the extremely volatile and uncertain cash flow situation of exporters, the interest rate subsidy system that expired on March 31 must continue.