The declining trend in engineering exports from India has prompted domestic export promotion body EEPC India to seek the Centre's support for the sector. Engineering exports, which grew by 18 per cent last year touching $40 billion, have declined by 22 per cent in the first six months of the current fiscal year.
“The scenario is anything but satisfactory. It is important for the government to provide for some support measures directed towards the engineering sector, which has so far not been given any specific assistance,” EEPC India Chairman Aman Chadha said.
Apart from sterilisation measures by the RBI, interest rates on term deposits should be reintroduced to incentivise exporters to keep their foreign exchange earnings in EEFC accounts, the body said.
“The duty drawback rates and the Duty Entitlement Passbook (DEPB) rates should be enhanced by 5 per cent on engineering items. The sector should also be brought under the Interest Subvention Scheme so that large scale engineering companies and merchant exporters can take benefit of interest subvention,” EEPC India said in a statement.
The body spelt out the need for a technology upgrade fund, for which EEPC India had drafted guidelines, to help the MSME sector.
“India’s engineering exports account for barely 0.6 per cent of world engineering exports. It is critical for India to move up the value chain in order to increase its share in world engineering exports,” Chadha said.
