Govt to announce a package for exporters that will rejig incentives, address problems related to foreign currency credit, rising rates of interest
The government will soon announce a fresh package for exporters that will rejig incentives and address problems related to accessing foreign currency credit and rising rates of interest.
"Global conditions have changed, budgets have changed and interest rates have changed,"commerce secretary Rahul Khullar said addressing a press conference, adding that the new package will have to incorporate all these changes.
He said there might be sectors that do not need incentives any more and others that might need it now. "For instance, we had removed benefits for onions and eggs some time back. We might look at the need to restore it," Khullar said.
Similarly, benefits may be taken away for exporting to certain markets and introduced for new markets. "Textiles was given incentives for six months to export to certain markets. We could look at extending the period and targetting other markets," he added.
Rising interest rates is another problem that the commerce department wants the package to address. While Khullar did not elaborate, it could mean that discount on interest rates given to exporters of certain goods could be reintroduced.
The commerce department will also try and sort out the problem being faced by exporters in accessing foreign currency denominated credit. "There are instances when banks stop giving credit in certain foreign currencies leading to huge problems," Khullar said.
Despite exports performing well, the commerce department is pushing for a package as it fears that the current uncertainty in the Euro zone and the budgetary problems being faced by the US could make things tough in the months to come.
Commenting on the falling rupee, the secretary said that it would certainly result in higher earnings for exporters, but they should not get too "greedy''. The only way to deal with the volatility in currencies is to hedge, and more exporters should resort to it, he said.
Briefing the media on the current state of affairs at the World Trade Organization, Khullar said that the US and some other countries were attempting to introduce new issues that they termed as 21st century issues' that was being opposed by many countries, including India.
The issues include climate change, currency, energy security and food security. "Since these issues do not have the backing of trade ministers, it is a clear violation of how WTO works," Khullar said.