Interviews
FICCI recommends measures to stimulate falling exports
05 Jan '09
7 min read
2. Interest rates subvention scheme on export credit should continue at least up to 31st March 2010. Further, interest subvention level should be enhanced from 2% to 4%.
3. Refunds from excise department to be made in 7 days instead of current 90 days.
4. Widen and diversify the markets and products covered under the Focus Market and Focus Product scheme.
5. Credit lines for good credit worthy exporting companies should be made available since LCs and international credit lines are not being readily accepted.
6. Temporary reintroduction of exemption under Section 80HHC of the Income Tax Act to give income tax relief to exporters.
7. Two years moratorium on term loans should be provided.
8. Further reduction in prices of petroleum products.
The results of the FICCI Export Survey show that for every single respondent who feels that export conditions may improve in the near term there are two respondents who feel otherwise. And this general feeling of pessimism holds true at all the three levels – overall export conditions, industry level export conditions and firm level export conditions.
While the outlook with regard to export volumes is particularly weak, with 51% of the participating companies fearing a dip in exports in the next six months, prospects regarding export prices are even worse. Nearly 62% of the companies have reported that they expect export prices to go down in the coming six months. In the last survey this figure stood at just 20%.
As importers are finding it difficult to raise money in their home countries, many have now started asking for price concessions from the Indian exporters. The depreciation of the Rupee to the 48 / 49 level against the US$ has added to this pressure coming from the foreign buyers. However, what is most important to note in this context is the aggressive behaviour of Chinese exporters on the pricing front.
Indian exporters have reported that on the back of significant government support players from the global export giant China are aggressively cutting prices in the international market and this is forcing all other players to follow suit or else they would continue to lose ground in an already shrinking market. 'Meet the China Price' is a demand coming from several international buyers and Indian exporters fear that this would intensify in the months ahead.
The survey shows that many Indian exporters have already cut their prices by an average 10% to 15% and more cuts in the months ahead cannot be ruled out.
Along with demand for price concessions, the exporters are also facing a situation where some of their clients are cancelling orders. Nearly 56% of the companies that participated in the survey said that they have faced at least a few cases of cancellation of orders. There have also been several cases where the international buyers have defaulted on their payments or are refusing to accept delivery of consignmentswith nearly 30% of the companies complaining about such behaviour.
3. Refunds from excise department to be made in 7 days instead of current 90 days.
4. Widen and diversify the markets and products covered under the Focus Market and Focus Product scheme.
5. Credit lines for good credit worthy exporting companies should be made available since LCs and international credit lines are not being readily accepted.
6. Temporary reintroduction of exemption under Section 80HHC of the Income Tax Act to give income tax relief to exporters.
7. Two years moratorium on term loans should be provided.
8. Further reduction in prices of petroleum products.
The results of the FICCI Export Survey show that for every single respondent who feels that export conditions may improve in the near term there are two respondents who feel otherwise. And this general feeling of pessimism holds true at all the three levels – overall export conditions, industry level export conditions and firm level export conditions.
While the outlook with regard to export volumes is particularly weak, with 51% of the participating companies fearing a dip in exports in the next six months, prospects regarding export prices are even worse. Nearly 62% of the companies have reported that they expect export prices to go down in the coming six months. In the last survey this figure stood at just 20%.
As importers are finding it difficult to raise money in their home countries, many have now started asking for price concessions from the Indian exporters. The depreciation of the Rupee to the 48 / 49 level against the US$ has added to this pressure coming from the foreign buyers. However, what is most important to note in this context is the aggressive behaviour of Chinese exporters on the pricing front.
Indian exporters have reported that on the back of significant government support players from the global export giant China are aggressively cutting prices in the international market and this is forcing all other players to follow suit or else they would continue to lose ground in an already shrinking market. 'Meet the China Price' is a demand coming from several international buyers and Indian exporters fear that this would intensify in the months ahead.
The survey shows that many Indian exporters have already cut their prices by an average 10% to 15% and more cuts in the months ahead cannot be ruled out.
Along with demand for price concessions, the exporters are also facing a situation where some of their clients are cancelling orders. Nearly 56% of the companies that participated in the survey said that they have faced at least a few cases of cancellation of orders. There have also been several cases where the international buyers have defaulted on their payments or are refusing to accept delivery of consignmentswith nearly 30% of the companies complaining about such behaviour.
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