Govt should come up with export development fund to bring diversification in Indian exports: FIEO

By Prerna Mishra: The government should come up with an export development fund aimed to branch out Indian exports with the help of marketing initiatives of small and medium exporters. This was voiced by Ajay Sahai, Director General & CEO Federation of Indian Export Organisations (FIEO), while speaking exclusively with SME News.

On the recent recommendations proposed by industry body Confederation of Indian Industry (CII) to the Commerce Ministry, Sahai said that country's exports are facing challenges due to few structural deficiencies which have been highlighted by premier export organizations and apex industry associations quite often. The serious consideration and appropriate solution to these issues is vital and can be termed as long term.

Recently, CII suggested some measures to Commerce Ministry to help India achieve the export target of USD 500 billion for 2014. The suggestions comprise of early implementation of Manufacturing Policy announced last year, harmonization in quality standards, instilling quality consciousness among SMEs, need of a comprehensive strategy for boosting services exports, providing marketing support to MSMEs via an export development fund.

Besides, various steps to elevate country's software services exports were also suggested. The expectations raised by Goldman Sachs, a full-service global investment banking and securities firm, could hurt India’s software services exports. The firm said that the global companies including US-based large corporations will cut IT spending in 2012.

The industry body also called to build educational and vocational training institutes for right employable workforce specially for IT vertical in tier II and III cities.

Talking about the major growth driver of the country, agriculture exports, CII said that the consistency in agricultural exports policy is important for economic growth and brand Image. The body also requested to abolish ban of export of food grains/ food product exports at any stage in order to attract customers confidence. Both import and export should be allowed as it also encourages our local industry.

Sahai further said, “The present situation of Indian exports requires few short-term issues to be addressed which include cost of credit and aggressive marketing. These two are of paramount importance to any MSME exporters. With the moderation in inflation, RBI should quickly take a call for reduction in the Interest rate to benefit manufacturing and export sector. For aggressive marketing, Government should come with an export development fund aimed to diversify Indian exports through the marketing initiatives of small and medium exporters. The fund should get at least 0.5 per cent of FOB value of Indian exports for meaningful contribution for Indian exporters.”

He also asked for complete Entrepreneurship Development Institute (EDI) connectivity amongst all the 13 agencies involved in imports and exports for seamless movement of cargo, compressing the delivery period of Indian exports.