Commerce Minister Nirmala Sitharaman on Thursday said the traditional export markets of US, Britain and European Union have become saturated and the trade in merchandise goods need a lot of handholding.
"With the traditional markets saturating, trade in merchandise goods needs lot of helping because demand is falling," Sitharaman said at the Economic Editors' Conference here.
"For want of more demand, we are looking for newer markets. Exporters have reached Latin America, South Africa. We have had success with tying up with countries like Chile, Peru," she added.
The Minister said that the government is trying to encourage exports and give it a boost sectorally by addressing their concerns.
It is the services sector that is still keeping pace, she added.
The government is in discussions for free-trade agreements with Canada and Australia, the Minister said.
Engineering goods, chemicals, drugs and pharmaceuticals, textiles, garments, gem, jewellery, diamonds, leather products, carpets, sea food and electronic goods account for a substantial share of India's exports.
Sitharaman had earlier said that to boost export, the ECGC, the government company which ensures sustained flow of exports, will have to support the exporters.
"We have to look for newer markets which may be in Africa or in Latin America and it is for ECGC to stand by the exporters to assure them that they are not going to face any risk," Sitharaman had said.
"ECGC's (formerly known as Export Credit Guarantee Corporation of India) role is very vital in handholding exporters in these trying times because exports have seen a continuous decline over several months," she had added.
Small and Medium Enterprises (SMEs) contribute a major chunk of exporters who receive the support from ECGC.
Around 90 per cent of world merchandise trade and services involve credit, guarantee or insurance. More than 90 per cent of India's merchandise exports are made on short term credit i.e. less than 360 days.
Estimates by ADB (Asian Development Bank) Institute indicate that exports from India suffered due to unmet trade finance needs to the order of $300 billion approximately.
IMF estimates suggest that globally bank intermediated trade finance support around 40 per cent of merchandise trade.
--IANS
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