Decline in Bank Credit Poses Threat to Export Sector

Exporters are set to address declining bank credit with Commerce and Industry Minister Piyush Goyal, as despite a 15% growth in exports, outstanding credit dropped by 5%. The Federation of Indian Export Organisation (FIEO) highlights that the credit growth isn't matching export needs and suggests regulatory and policy changes to support exporters.

The dwindling bank credit available to exporters is becoming a major concern, with industry representatives planning to raise the issue during a meeting with Commerce and Industry Minister Piyush Goyal on September 11.

While export figures showed a promising 15% increase over the past three fiscal years, the outstanding credit amount saw a 5% decline from March 2022 to March 2024, according to data from the Federation of Indian Export Organisation (FIEO).

FIEO Director General Ajay Sahai emphasized the urgent need for regulatory intervention, suggesting that the Reserve Bank of India should consider a sub-target for export credit within the priority sector lending framework. The declining credit facilities are impacting export growth despite the sector's significant potential, he added.

(With inputs from agencies.)