Exporters seek helping hand to ride out global slowdown

FIEO urges reintroduction of interest subsidies, tax breaks for overseas marketing spends in pre-Budget interaction with Finance Minister, officials; group seeks higher allocations for export promotion schemes

Updated - November 24, 2022 10:42 pm IST

Published - November 24, 2022 09:11 pm IST - NEW DELHI 

With their order books shrinking and credit costs rising, exporters on Thursday urged Finance Minister Nirmala Sitharaman to reintroduce interest subsidies, grant tax breaks for overseas marketing spends, and expand ‘inadequate’ allocations for the Commerce Ministry’s export promotion schemes in the forthcoming Union Budget. 

Observing that the rupee’s decline against the U.S. dollar has not been as steep as other currencies, the Federation of Indian Export Organisations (FIEO) president A. Sakthivel indicated that the Indian currency’s relative strength was, however, affecting the competitiveness of exports, which need support. He was speaking at a Budget consultation meeting held by the Finance Ministry with representatives from the trade and services sectors.    

Terming the allocations to the Department of Commerce as insufficient for spurring exports, FIEO pointed out that the Remission of Duties, Taxes on Export Products (RoDTEP) scheme which is meant to provide ‘zero rating’ of exports, had excluded sectors like chemicals, pharmaceuticals, iron and steel. 

“When global demand is declining, it becomes all the more necessary to go for aggressive marketing. However, most Indian companies were cutting marketing spends in view of contraction,” Mr. Sakthivel said, adding that this would hurt prospects of ‘getting whatever little demand there is” currently and even when the global situation improved. 

Micro, Small and Medium enterprises (MSMEs) needed more support, he noted, adding that credit costs for most smaller firms were now between 11% and 13% and would likely increase further in the coming months. “There is an urgent need to restore the interest equalisation benefit of 5% to manufacturer MSMEs and 3% to all 410 tariff lines as existed prior to October 2021, as cost of credit has crossed the pre-COVID level and is adversely impacting exporters,” Mr. Sakthivel said.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.