FIEO For Concessional Credit For Exporters, Concessional Credit For Indian Exporters, FIEO Demanded Incentives For Value Addition in Exports, Concessional Credit For Exporters in India

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SME Times News Bureau | 27 May, 2010
The Federation of Indian Export Organisations (FIEO) Wednesday demanded incentives for value addition in exports and regulated rates of export credit considering tough global market conditions and stagnant credit offtake.

The demands came after RBI Deputy Governor K C Chakrabarty's comment, while releasing the India, Micro, Small and Medium Enterprise Report 2010 at a function in Kochi on Friday, that Micro, Small and Medium Enterprises (MSMEs) should not to ask for concessional credit.

Citing tough global market conditions arising from the sovereign debt crisis in Europe, FIEO president A Sakthivel said when the markets of the advanced countries are focusing on domestic demand rather than exports, deregulation of interest rates for the export sector by the RBI will imply that the Small and Medium Enterprise (SME) sector will be left at the mercy of the profit bottom-lines of the banks.

He said that credit offtake has been stagnant partly because there is a general lull around this time of the financial year but more so because of the 'wait & watch' situation arising due to conditions in the global market.

Due to tough market condition, several IPO/Commercial Papers/ECB/FCCBs which have been approved but are still kept 'on hold' by the corporate sector, Sakthivel added.

The FIEO chief also elaborated that the debt to GDP ratio of most countries in Europe are alarming (Ireland debt is 4 times that of the GDP, UK debt 1.5 times that of the GDP) indicating that exports to the Euro zone market may be difficult to sustain in the short/medium term.

FIEO cautioned that once the low base effect wears out export statistics may be quite contrary to the existing figures.