Exporters, hit by a demand slump in the global market, have sought RBI's intervention for dollar credit from banks at competitive rates.
Exporters in the small and medium sector are not getting dollar credit, and if made available, the same is much above the RBI's fixed rate of 3 per cent plus benchmark global interest rate (LIBOR), FIEO President A Sakthivel said in a statement.
Availability of dollar denominated credit is need of the hour for exports, Sakthivel said, adding there is an interest rate advantage in borrowing in the US currency.
"RBI may urge banks to provide dollar loans at LIBOR + 300 basis points which are cost competitive to the MSME export sector to enable them to manufacture products to a recession hit international market, which is sensitive to pricing," Sakthivel said.
To provide dollar credit to exporters, the government has set up a committee, comprising the Finance Secretary, the Commerce Secretary and the Indian Banks Association.
India's exports remained downhill for the 11th month in a row, declining by 19.4 per cent to $14.28 billion in August.
For the April-August period of the current fiscal, the overseas shipments dropped by 31 per cent to $64.12 billion from $92.95 billion in the same period last year.