Exporters' body FIEO has urged the government to announce measures such as interest-free working capital and subsidy on credit from banks, with a view to support the sector to deal with the COVID-19 pandemic.
In a letter to Prime Minister Narendra Modi, the Federation of Indian Export Organisations (FIEO) said the country's exports will take unprecedented hit in such challenging times.
The exports sector is facing over 50 per cent cancellation and the worst hit segments are leather, carpets, silk, handicrafts, and apparels that are having over 80 per cent cancellations and this will also put pressure on current account deficit, FIEO President Sharad Saraf said.
"We humbly request you to kindly announce a comprehensive package for exports to deal with challenges emerging from COVID-19. A crisis of such magnitude creates both the challenges and opportunity. Challenges in the short term and opportunity in medium to long term, if we play our cards well," he added.
He said the exporters should be given additional 2 per cent incentive under the Merchandise Export from India Scheme and labour-intensive sector to be provided additional 4 per cent till March 2021.
"Interest equalisation or subsidy scheme, which lapsed on March 31, 2020, may be reintroduced immediately for all products up to March 31, 2021. All exporters, irrespective of product groups, including merchant and service exporters should be given the benefit of the scheme," Saraf added.
Further, he suggested the government that to push exports in after COVID-19, India should engage quickly to work out free-trade agreement with countries particularly the US, Europe, Australia and New Zealand, as they are important for employment-intensive sectors and services.
"The government should create a corpus of an export marketing fund equivalent to 1 per cent of exports value to support international marketing.
"We should set up Mega India Trade Centres in important exports markets for permanent display and distribution of Indian products," Saraf said.
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