Tackling Trade Finance Challenges: Commerce Secretary's Meeting Insights

Commerce Secretary Sunil Barthwal met with officials and export council representatives to address trade finance issues. The discussion highlighted the need for affordable credit, improved insurance, and priority lending amidst declining exporter credit. Despite a 15% growth in exports, export credit has decreased, raising concerns.

Commerce Secretary Sunil Barthwal convened a meeting on Monday with key government officials and export promotion council representatives to address pressing trade finance issues for exporters, an official revealed.

The agenda of the meeting centered on the urgent requirement for low-interest credit, increased insurance coverage, and prioritized lending options.

The gathering comes as exporters continue to voice concerns over dwindling bank credit, which impacts export activities.

From 2021-22 to 2023-24, exports witnessed a 15% growth in rupee terms, but outstanding credit fell by 5% as of March 2024.

The Federation of Indian Export Organisation noted that export credit growth lags behind the country's rising export numbers.

The export credit value reduced to Rs 2,17,406 crore in March 2024, compared to Rs 2,27,452 crore in the previous year.

An official confirmed a presentation on trade finance was delivered, setting the stage for further talks.

The meeting, led by Barthwal, included finance ministry, RBI, and export council representatives.

Industry experts discussed strategies to boost the finance flow amid a 13-month steep decline in exports.

In August, exports dropped 9.3% to USD 34.71 billion due to global market volatility, whereas the trade deficit surged to a 10-month peak of USD 29.65 billion.

April-August exports rose slightly by 1.14% to USD 178.68 billion, whereas imports increased by 7% to USD 295.32 billion.

Merchandise trade deficit for April-August 2024 stood at USD 116.64 billion compared to USD 99.16 billion the previous year.

(With inputs from agencies.)