The Commerce and Industry Ministry is making efforts to ensure the availability of dollar credit to exporters.
Disclosing this, the Commerce, Industry and Textile Minister, Mr Anand Sharma, said on Tuesday that regular meetings of the inter-ministerial committee on dollar credit, formed in 2009, will be revived soon.
The committee comprises the Reserve Bank of India, the Ministries of Commerce and Finance and representatives from the banking industry. Mr Sharma indicated that the committee would meet within a fortnight to resolve the issue on dollar credit. He was speaking to reporters after a meeting of the Board of Trade (BoT).
Mr Ramu Deora, President, Federation of Indian Export Organisations, who also attended the meeting, said Packing Credit in Foreign Currency or PCFC -- which should be made available at LIBOR (London Inter-Bank Offer Rate) plus 200 basis points -- is not being extended by the banks. PCFC should be given to exporters at least up to 50 per cent of the dollar earned by them in the previous month, he said, adding that those who earned dollars should get dollars for their export production to import inputs.
Mr Sharma said the other matters of concern include the slowdown in manufacturing and mining sectors as well as the large trade deficit (of around $20 billion) with China. China is India’s largest trading partner with bilateral trade touching $60 billion last year.
In July, the growth in manufacturing sector slowed down to 2.3 per cent as against 10.8 per cent a year ago and 10 per cent a month ago, while the mining sector’s growth decelerated to 2.8 per cent compared to 8.7 per cent a year ago.
Mr Sharma said the country’s exports were on track to meet the $300 billion target for 2011-12.
The Government is likely to announce on October 13 some incentives to labour-intensive export industries that are struggling due to the demand slowdown in traditional markets such as the US and the European Union. The second phase of transaction cost reduction will also be rolled out soon, Mr Sharma said.
Exports during April-August were $134.5 billion, recording a 54 per cent growth.
Among those who attended the BoT meeting included the CII President Mr B Muthuraman and Mr Venu Srinivasan of TVS Motor Company.