Exporters have complained that a continued financial crunch was not allowing many units to take up fresh orders coming from new buyers following the relaxation of the lockdown in several countries and sought government help in release of blocked refunds.
“At this point of time, when exporters are receiving new orders from new buyers and destinations, support needs to be given to help them execute such orders. Unfortunately, many of the exporters have expressed their inability to honour such orders, in view of liquidity challenges, due to stoppage of exports benefits and refund of GST,” according to a statement circulated by exporters body FIEO on Monday.
Exporters are facing huge liquidity challenges due to the stoppage of Merchandise Export from India Scheme (MEIS) benefits of over ₹10,000 crore from April 1, 2020 and IGST (Integrated Goods and Services Tax) refund now, the release added.
India’s exports of goods have taken a big hit due to the disruptions caused by the Covid-19 pandemic. In July, exports declined for the fifth consecutive month posting a fall (year-on-year) of 10.2 percent at $23.64 billion. However, the pace of decline was much lower in July compared to the 60 percent hit suffered by exports in April.
FIEO said that despite the pandemic, Indian exporters have started receiving a lot of enquiries and orders from across the globe helping many sectors show improved export performance, which is likely to get better in next few months.
The exporters’ organisation urged the government to look into their concerns as hiccups in export efforts, at this point of time, could result in their losing buyers while successful execution of these orders will bring additional export business from new and unexplored territories. “All wings of the government should sit together to resolve the technical and financial issues, helping the seamless flow of liquidity to exports sector,” the statement said.