The Federation of Indian Export Organisations (FIEO) has called on the government to prioritize export credit, address escalating logistics costs, establish a green transition fund for exporters, and expedite pending GST refunds for foreign tourists. These steps are deemed crucial for sustaining India’s export growth and bolstering global competitiveness. Despite a challenging global trade landscape, India’s exports have shown resilience, but FIEO cautions that the necessary institutional backing has not kept pace with industry demands.
FIEO highlighted a significant decline in Priority Sector Lending (PSL) for export credit, resulting in a nearly 14% contraction in export credit recently. This downturn has led to severe liquidity constraints, especially impacting MSME exporters. Exporters are grappling with prolonged payment cycles, increased logistics expenses, heightened compliance obligations, and fierce global rivalry, underscoring the critical need for prompt access to affordable working capital.
The exporters’ body emphasized the urgency for collaboration between the government, the Reserve Bank of India, and the banking sector to reinstate export credit as a strategic priority. It stressed the importance of ensuring sufficient and timely export finance at globally competitive interest rates, as well as encouraging banks to adopt a more supportive stance towards exporters. A robust export credit framework is deemed indispensable for India to achieve its goal of becoming a $2 trillion export economy.
Addressing concerns related to logistics, FIEO pointed out challenges faced by exporters such as soaring ocean freight rates, container and vessel shortages, and opaque charges levied by shipping lines and their agents. These factors are driving up logistics costs, diminishing export competitiveness, and impacting delivery schedules, particularly for MSMEs. The organization urged the government to collaborate with relevant authorities to enhance transparency in freight charges, improve container and vessel availability, and establish a monitoring mechanism to address freight and logistics issues promptly during market disruptions.
