New Delhi: Worried over the growth rate of India's exports in October entering negative zone after a gap of six months, India Inc has asked the government to consider re-introducing interest subvention scheme and take steps to remove the uncertainty over new foreign trade policy.
India's exports contracted by 5.04 percent to USD 26 billion in October while imports grew by 3.62 percent, pushing up the trade deficit as gold imports shot up during the month.
Expressing disappointment over the exports figure of October, exporters' body FIEO President M Rafeeque Ahmed said: "While we were conscious of challenges in emerging global scenario, we expected atleast modest growth of single digit".
Ahmed said the government should immediately re-introduce interest subvention on exports from April 2014 as banks have stopped passing interest subsidy to exporters especially those in the MSME sector thereby raising cost by 3 percent. Moreover, he said, banks have started recovering the same in absence of any communication from the RBI or the government.
The FIEO President said the uncertainty over new Foreign Trade Policy (FTP) should be removed as exporters are in dilemma in doing their costing while contracting for fresh orders.
"A decline in exports in October is a clear signal about the nagging worries on account of slowdown in major world markets and the Indian exporters face a tough time going forward," Assocham President Rana Kapoor said.
"Urgent steps like reduction in cost of production and fiscal support are required to ensure that our exports do not slip further into rough weather," he added.
Trade deficit during the seven month period of 2014-15 stands at USD 83.75 billion as against USD 87.31 billion in the same period last fiscal.
"Global economic woes reflected in the Eurozone and several other important economies such as Japan are catching up with the Indian exports which have shown a decline in October, after staying in positive territory for several months," EEPC India Chairman Anupam Shah said.
"A sharp decline in engineering exports by over nine percent in October is a reminder about even more difficult period ahead," he added.
During April-October period of the current fiscal, the country's exports are up 4.72 percent to USD 189.79 billion, while imports are up 1.86 percent to USD 273.55 billion.
