Exporters need a grievance cell

EXIM MATTERS

My profession requires me to travel and interact with exporters and importers from many parts of the country.

During such interactions, there is one issue that most of the exporters flag as most bothersome and that is the strengthening of the rupee. Whether it is the service providers or manufacturers or merchant exporters, their major concern is the falling margins in export business.

A survey conducted recently by the Federation of Indian Chambers of Commerce and Industry (Ficci) says that more than 73 per cent of exporters view the rupee appreciation as a 'very serious' problem and 22 per cent found it to be a 'moderate' one.

The Commerce Minister has also expressed concern about the impact of the rising rupee, especially on job-losses and has persuaded the finance ministry to accept a relief package. But too little has come in too late, feel the affected exporters, and the manner in which the relief is made available is like throwing something at beggars.

The exporters also feel that economists, academicians and journalists who talk of the overall benefits that a strong rupee brings to the economy may be right in their own way but running businesses in loss or wafer-thin margins is a different matter.

The survey says that the exporters want easier export finance, compensation for freight escalations, higher DEPB or drawback rates, income tax exemptions, zero duty on capital goods import, better infrastructure and so on.

The exporters are looking to cut costs of inventory, travel, advertising, entertainment, logistics, selling, administration and participation in trade fairs. They are also trying to rationalise manpower and sell forward their export receivables.

I had argued last week that there is enough that can be done by way of procedural relaxations and facilitations that would save unnecessary expenses for the exporters and mentioned some steps that can be taken quickly. The point is that such reforms of the procedures do not call for too much money or time.

The commerce ministry, in consultation with the finance ministry, can constitute high-powered cells in each zone to redress grievances and regularise procedural infractions, if need be, even by granting exemption from a strict application of the Foreign Trade Policy or Procedures or from observation of the conditions of the related exemption notifications.

The finance ministry can allow easier conversion of shipping bills from one export promotion scheme to the other. These initiatives will allow closure of many old cases of advance license.

Such cells can be constituted by the finance ministry to take a re-look at the excise, customs and service tax cases that clog up the courts. It is common knowledge that many cases are pursued because the concerned officials want to play safe. Such cases are not only burdensome for the trade but clog up the courts too.

A common complaint of exporters is that our banks do not take up with their counterparts abroad, the problem of unexplained or unauthorised deductions from export proceeds. The Reserve Bank and Bank Managements should look into the matter and find ways to compensate the exporters.

tncr@sify.com