Navigating Export Finance Challenges: Strategies for Indian Exporters

Indian exporters are facing severe liquidity challenges due to high interest rates and declining export finance, impacting their competitiveness. Proposed solutions include extending the interest equalisation scheme, increasing credit coverage, and improving the RoDTEP scheme's efficiency. The evolving global trade environment presents both challenges and opportunities.

Indian exporters are contending with serious liquidity challenges amid high interest rates and dwindling export finance, which threaten their global competitiveness, according to Sanjay Budhia, Chairman of the CII National Committee on EXIM.

To tackle these obstacles, Budhia calls for collaboration between the government and banks to devise effective solutions. He suggests extending the now-expired interest equalisation scheme for three more years for all manufacturing exporters, including micro, small, and medium enterprises (MSMEs).

This extension is deemed crucial as the limited duration of the scheme places Indian manufacturers at a disadvantage. Furthermore, increasing the interest subsidy on pre- and post-shipment credit from 3% to 5% could significantly benefit MSME exporters.

(With inputs from agencies.)