How FM Sitharaman intends to contain dropping exports
New Delhi, Sep 14: India's exports in August have dropped by 6.05 per cent. The growth in exports had hit a 41-month low in June this year as all major foreign exchange earners such as petroleum oil, gems and jewellery, and engineering goods recorded a poor performance.
Imports too declined by 13.45 per cent to USD 39.58 billion, narrowing trade deficit to $13.45 billion in August.
The difference between new export and net import is called trade deficit. The more it is, more worrying it is for the government as it is a key macro-economic indicator.
To revive exports, Finance Minister Nirmala Sitharaman today announced revised priority sector lending (PSL) norms for exporters which will release an additional funding of Rs 36,000 crore to Rs 68,000 crore to them. PSL norms for export credit have been examined and enabling guidelines are under consideration of the Reserve Bank of India, she said.
"This will release an additional Rs 36,000 crore to Rs 68,000 crore as export credit under priority sector," Sitharaman told reporters here.
She also said export finance will be actively monitored by an inter-ministerial working group in the Department of Commerce. Also, Export Credit Guarantee Corporation (ECGC) will expand the scope of export credit insurance scheme. The minister said the initiative is expected to cost Rs 1,700 crore annually and will enable reduction in overall cost of export credit including interest rates, especially to MSMEs.
She also announced that Free Trade Agreement (FTA) Utilisation Mission would be set to help exporters optimally utilise the concessional tariffs under trade pacts which India has signed with several countries. Besides, annual mega shopping festivals will be organised in the country at four places focusing on sectors like handicraft, yoga, tourism, textiles and leather.
India's industrial production growth too slowed to 4.3 per cent in July, dragged mainly by manufacturing sector's poor show, according to a government data.