Engineering exports can surpass UD$ 70 billion if interest subvention extended: EEPC India Mumbai : Indias engineering exports can well surpass the crucial UD$ 70 billion mark this year, if exporters are made competitive by extending them three per cent interest subvention for the entire fiscal 2014-15 , the apex body EEPC India has said , reiterating its stand ahead of the Union Budget. Interest subvention of 3 per cent was given to the MSME sector and 235 engineering tariff lines till March 31, 2014. We feel that this should be extended for 2014-15 at least in view of the above gap in cost of finance between our rates and international rates. We also feel that it should be extended to the entire engineering sector, said the EEPC India (formerly the Engineering Export Promotion Council) Anupam Shah said. He said the current budgetary allocation on this account is Rs 1200 crore and an additional amount of Rs 500 core will cover the entire sector. This will have a multiplier impact on engineering exports and we could surpass the target of UD$ 70 billion by another 5-10 per cent, if interest subvention of 3 to 4 per cent is given to the entire engineering sector, Mr Shah said. With regard to Rupee Export Credit, the interest rate charged varies from bank to bank and is, at present, between 10.5 per cent and 11 per annum. With 3 percent interest subvention, the Rupee Export Credit becomes in the range of 7.5 per cent and 8 per cent per annum. Thus, the interest subvention lowers the cost of credit considerably even though there is considerable gap with one year liber rates, he said. The EEPC India chief said this is the right time to go for a push since the order book position from the US has considerably improved, which is likely to get reflected in the shipments in the coming months. Now those exporters across different manufacturing lines are receiving orders , thanks to an impressive revival of the US in the second quarter of the year, they must get working capital at competitive rates so that their zeal for higher shipments become pronounced and maintained. Once enabled, there is no reason, engineering exports cannot exceed UD$ 70 billion and emerge among the top sectors in the export basket of the country, Shah said. Source: Shipping Times
Posted on: Wed, 09 Jul 2014 06:16:52 +0000