Liquidity crunch, policy uncertainties hit Indian export orders: FIEO

Sakthivel said he had raised with commerce minister Piyush Goyal the issue of shortage of containers, frequent shutouts by shipping lines and exorbitant freight rates that are having a dampening effect on exports.

The other issues that FIEO has raised with the government include rationalisation of export policy of raw material to strike a balance between exports and domestic requirement; automatic enhancement of the existing working capital requirement by 20-25 per cent by banks; extension of factoring facilities with institutions like the Export Credit Guarantee Corporation of India Ltd; and removal of transport and logistics problems by regulating movement of empty containers from India.

"The federation has also highlighted the skyrocketed increase in freight rates between 300 per cent to 350 per cent and to some destinations like South America and West Africa, it is over 500 per cent. It was suggested that freight subsidy may be given till freight charges normalize," he said.

He added that large ships may be encouraged to call on some Indian ports so that the backlog is reduced, and the Shipping Corporation of India may be asked to take a few ships on lease for sailing to our major exports/imports destinations.

FIEO vice chairman Khalid Khan said the continuous growth in exports since March will help in achieving the target of $400 billion for this fiscal.

Fibre2Fashion News Desk (DS)