Lower cost of credit key to more exports

Urgent need to provide finance to exporters at an affordable cost: industrialist

Veteran industrialist from Hyderabad Mahesh K. Desai, who is set to become the next chairman of EEPC India (formerly Engineering Export Promotion Council), said that it is imperative to reduce the cost of credit for exporters.

“There is an urgent need to provide credit and finance to exporting community at an affordable cost. If not at par with London Interbank Offered Rate, the [rate of interest] should be LIBOR plus 2%,” he said.

Speaking on the sidelines of an awards’ distribution function, the export promotion body had organised here recently, he sought to underscore how reduction in the cost of credit would be helpful in the present, globally challenging times for trade. It is also important as India is eyeing to double engineering exports in the next five years and touch $200 billion by 2030.

Higher cost of finance is bound to impact the competitiveness of exporters. The government can support with concessional finance for import of machinery or lower the duties for such imports.

A delegation of exporters that had recently met the Commerce Minister and highlighted the issue was assured by the latter that the government will look into their plea, he added.

While cost of credit remains important, there also are other measures required for accelerating the pace of engineering exports, including exporters enhancing their efforts and adoption of latest technologies such as Artificial Intelligence at the manufacturing centres.

Mr. Desai, who is likely to take charge next month as EEPC India chairman for two years, said that he would be the first resident of south India to do so.

The Council, coming under the Union Ministry of Commerce and Industry, was set up in 1955. A lot of ground has been covered from engineering exports of $10 million then to around $80 billion now, he said.

As the exporters set out to achieve new targets, including contributing to India’s share in global trade growing from 2% to 5%, the need for engineering exporters is to “move from traditional items to value added items.”

The opening up of the defence and avionics sector, particularly defence, offered growth prospects for the exporters. Other aspects that will help push up growth is harnessing the power of Artificial Intelligence. “We all have to adopt new technologies, new systems and new ways of working. We have missed the industrial revolution, and do not want to miss Industry 4.0, which includes IT and IoT. The government is very much with us,” said Mr. Desai, chairman of Meera Group.

Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Jul 2, 2020 9:46:59 PM | https://www.thehindu.com/news/cities/Hyderabad/lower-cost-of-credit-key-to-more-exports/article30832120.ece

Next Story