Exporters have petitioned the government about rise in costs due to higher oil prices, lack of adequate credit since the Nirav Modi fraud came to light and repeated delays in GST refunds, while maintaining that they have gained little from the rupee slide. “For small exporters, credit is a problem ever since the fraud at PNB. It is taking much longer to get credit as proposals are sent to zonal office and regional office. For large exporters too, the cost has increased by 5-6%,” said Federation of Indian Export Organisations president Ganesh Kumar Gupta.
To top it up, the government is holding up GST refunds of around Rs 8,000-9,000 crore, while states have not given input tax credit to the tune of Rs 15,000 crore, which all added to the cost of Indian exports that already lack competitiveness due to higher logistics and infrastructure spends. Gupta said he had flagged the concerns to commerce and industry minister Suresh Prabhu on Tuesday. Export credit declined 26% during the last financial year, which was fallowed by a 21% fall during the first quarter of the current financial year.
On the rupee’s tantrum, Gupta said, the limited intervention by RBI has not been able to contain the volatility. “Contrary to general perception, such depreciation has not benefited exports to the extent anticipated.” India’s exports have been rising over the past few months, but exporters see the recent developments are expected to push pressure. Further, he said FIEO has suggested a barter system trade with Iran. Gupta said that liquidity is a major area of concern, particularly for MSME exporters, who constitute the bulk of exports in employment-intensive sectors.