Fieo Expects 20% Rise In Exports In Fy14

MUMBAI: Stating that some green-shoots are emerging on the external front as reflected in the recent export numbers, the apex body of exporters today said it expects outward shipments to grow 20 per cent in FY14.

"We are already seeing a recovery in the US, which is leading to better demand. Additionally, markets like Africa and Latin America are also witnessing demand growth," said Rafeeque Ahmed, President of Federation of Indian Export Organisations (Fieo). He was talking to reporters here after meeting the RBI brass as part of the customary pre-policy meeting.

Ahmed said they urged RBI to increase the rupee-dollar swap facility of USD 6.5 billion to USD 25 billion and also sought an extension of this special scheme which allows banks to refinance their export credit positions.

"The USD 6.5-billion limit has already been exhausted and we want not only an extension in scheme for the one more year, but also a hike in the amount to USD 25 billion."

The RBI is scheduled to unveil the annual monetary policy on May 3. Also, the Commerce Ministry will unveil the annual foreign trade policy soon wherein it is widely expected that Government will offer some sops to boost exports.

In remarks contrary to widely-held beliefs, Ahmed said China is also a good opportunity for exporters as manufacturing costs are going up in that country.

Ahmed said exports in FY13 are expected to do below the previous year's record mark and may not reach the USD 300 billion level, but expressed the hope that the new fiscal will be better and outward shipments will grow by 15-20 per cent.

The Fieo President pointed out the recent data showing a rise in exports in January-February and said the picture is set to get better in the new fiscal.

In January, exports made a marginal recovery and entered the positive zone after a gap of eight months, posting a growth of 0.82 per cent. This was followed up with a better showing of 4.25 per cent growth in February.
On the back of record numbers in FY12, the government had set USD 360-billion target for exports in FY13. But since then the global economy faltered, forcing the government to recently admit exports would not be meeting the target and not even touch last year's figure of USD 304 billion.

The current account deficit has deteriorated to a record high of 6.7 per cent of GDP for the third quarter of FY13 because of a slew of reasons, including the slack in exports and rise in imports, especially of oil and gold.

The overall CAD in the first three quarters of the past fiscal stood at 5.3 per cent of GDP, a historic high.

Ahmed said RBI Governor Subbarao sounded concerned over the current account deficit during the interaction with the industry bodies and added that Fieo expects concrete actions given the uphill task at hand.

He said a majority of the trade bodies representatives called for a cut in the interest rates, even though the RBI had explicitly mentioned, in the mid-quarter policy review last month, that such a scope is limited.

Milind Kamble of the Dalit Indian Chamber of Commerce and Industry said his organisation has requested RBI to ensure that credit reaches the large number of entrepreneurs from the SC/ST categories.

"The priority sector lending norms say such enterprises should be supported, but bank credit does not come to such entrepreneurs," Kamble averred, and said the lack of collaterals is an issue for such entrepreneurs.

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