Exporters Need Financial Assistance in the Upcoming Budget

Exporters proposed recently that the upcoming budget include policies to increase exports and support job creation, such as the establishment of a fund and lending at reasonable rates. The Federation of Indian Export Organizations (FIEO) said the depreciation of the rupee against the US dollar is affecting exports' competitiveness and as a result, the sector needs more assistance in a pre-budget meeting with Finance Minister Nirmala Sitharaman. Let’s discuss the notification in detail.

Exporters need financial assistance in the upcoming Budget

Recently, the exporters suggested that the forthcoming budget include measures to boost exports and assist job creation, such as the creation of a fund and lending at competitive rates. In a pre-budget meeting with Finance Minister Nirmala Sitharaman, the Federation of Indian Export Organizations (FIEO) claimed that the weakening of the rupee against the US dollar is affecting exports' competitiveness and that, as a result, the sector needs more support.

"The largest difficulty the nation faces is creating jobs... We would implore the government to offer financial assistance to businesses that increase employment in the export industry, "said the exporter's association. It stated that incentives could be given based on criteria such as increased exports and new job creation.

According to the exporters' organization, "aggressive" marketing is essential at a time when worldwide demand for commodities is dropping. It was also stated that the $200 crore support provided under the Market Development Assistance (MDA) scheme is only a "drop in the ocean" when compared to the $470 billion in exports. Also, know the list of Importers Data. 

It was suggested that a particular programme for items exported by MSME can be implemented in the Budget, adding that "hence, for aggressive marketing, there is a need for the development of an Export Development Fund with a corpus of least 0.5 percent of preceding year's exports."

On the direct tax front, it has pushed for an expansion of the investment deduction. On R&D, it has been proposed to eliminate TCS (Tax Collected at Source) to streamline the administrative process.

"The assistance provided under the Market Development Assistance (MDA) scheme, with a total allocation of less than Rs 200 crore, is simply a drop in the ocean when it comes to promoting exports to USD 460-470 billion.

Therefore, it was advised, an export development fund with a corpus of at least 0.5% of exports from the previous year was needed for aggressive marketing. In addition, a 200 percent tax deduction on exporters' out-of-country marketing expenses was requested.

Also, the cost of transportation services would be upgraded to between USD 150 and USD 200 billion when we require to double our global trade to USD 2 trillion in a USD 5 trillion economy. We can save between $40 and $50 billion annually if an Indian shipping line gains just 25% of such a market "It read.

It requested that tax and fiscal incentives be used to encourage the private sector to establish a global Indian shipping line in order to take advantage of the ready market that is available to them.

Further Notification by Commerce Industry

Additionally, it stated that the majority of MSMEs' credit rates have already surpassed the double-digit threshold and are currently between 11 and 13 percent.

In the following few months, we anticipate the same to grow further. Since the cost of credit has surpassed the pre-COVID level and is negatively affecting exporters, it is important to reinstate the interest equalisation benefit of 5% to manufacturer MSMEs and 3% to all 410 tariff lines (wide sectors), as it existed before to October 2021 "The exporters' group stated.

According to data released by the commerce ministry, India's exports returned to the red after a lapse of about two years, falling sharply by 16.65% to USD 29.78 billion in October, primarily due to a slowdown in global demand, even as the trade deficit increased to USD 26.91 billion.

Important export industries with negative growth in October included gems and jewellery, engineering, petroleum products, ready-made clothing of all fabrics, chemicals, pharmaceuticals, marine products, and leather. ExportImportData provides reliable Import data, Importer data, and much more. It also enables you to acquire data on the top importers, HS Codes, etc. If you have any kind of query regarding the Export Import Data We are always available to assist you and expand your business in the global market.