New Delhi, Apr 18: The hike in ceiling on the interest rate on foreign currency by 25 basis points will increase the cost of credit to the export sector, rendering Indian exports less competetive, the Federation of Indian Export Organisations (FIEO) said here today.
''The policy has reiterated to focus on credit quality and financial market conditions to support export and investment demand in the economy for maintaining financial stability. This will result in a more conducive environment for exports,'' FIEO President O P Garg said.
Lauding the RBI upon delegating authority to Authorised Dealers (ADs) to extend the time limit for realisation of export proceeds upto invoice value of 1,00,000 dollars beyond six months, he said this move would benefit a large number of exports.
Mr Garg said while the flow of credit to the industry as a whole has shown an increase of 15.6 per cent in 2005-06 from 11.3 per cent a year ago, the export sector continues to lag behind in the dispensation of credit which is below the earmarked level of 12 per cent.