With their order books shrinking and credit costs rising, exporters on Thursday urged Finance Minister Nirmala Sitharaman to resume interest subsidy, tax exemption for overseas marketing expenses and the commerce ministry’s export promotion schemes in the upcoming Union Budget. Urged to expand the ‘insufficient’ allocation.
Noting that the rupee’s fall against the US dollar has not been as sharp as that of other currencies, Federation of Indian Export Organization (FIEO) President A.K. Sakthivel indicated that the relative strength of the Indian currency, however, is affecting the competitiveness of exports, which needs support. He was speaking at a budget consultation meeting organized by the Finance Ministry with representatives of trade and service sectors.
Terming the Department of Commerce’s allocation as insufficient to promote exports, FIEO pointed out that the Remission of Duties, Tax on Export Products (RoDTEP) scheme, which is meant to provide ‘zero rating’ of exports, has made a significant difference to industries such as chemicals, pharmaceuticals, areas were excluded. , iron and Steel.
“When global demand is on the decline, it becomes all the more necessary to go for aggressive marketing. However, most Indian companies were cutting marketing spend in view of the contraction,” Mr Sakthivel said, adding that this would hurt their chances of achieving ‘whatever low demand there is’ at present and even if the global situation improves.
Micro, small and medium enterprises (MSMEs) needed more support, he said, adding that credit cost for most small firms was now between 11% and 13% and was likely to increase further in the coming months. “There is an urgent need to restore interest equivalence benefits of 5% and 3% to manufacturer MSMEs for all 410 tariff lines existing before October 2021, as the cost of credit has crossed pre-COVID levels and exporters are adversely affected is pouring in,” said Mr. Sakthivel.