Exports sector may soon get the priority sector lending status from the lenders as the discussions at the finance ministry and Reserve Bank of India (RBI) on the issue are now at an advanced stage, says top official.
Disclosing this to ET, the president of Federation of Indian Export Organizations (FIEO) M. Rafeeque Ahmed said the Federation was requesting the government to fix at least 5% in the current priority sector cap of 40% for exports.
"The idea is to ensure credit flows to the exports sector. Banks will be compelled to lend to exporters with priority sector lending status. I hope the lenders will give priority sector status to exports and I am sure something will come up in the next couple of months," said Rafeeque.
He said a high-level delegation of exporters led by FIEO was planning to meet the RBI Governor this month-end to discuss the issue. Rafeeque was in Hyderabad on Monday visiting the Andhra Pradesh Trade Promotion Corporation (APTPC), where the Corporation's managing director Sadhu Sundar made a presentation on the export performance of Andhra Pradesh. The APTPC MD said the state expects to report a growth of 16% this fiscal over last year's exports of Rs 1.33 lakh crore.
Rafeeque said the Indian merchandise exports during the second half were expected to see a growth of 12-15%. "The government of India has fixed a target of $325 billion exports for this year. We are sure that this year we will be able to make that number and even exceed it. We see it between $330-350 billion."
The FIEO president said all the items in the export basket were doing well now. In the beginning of the year, gems and jewellery, oil, electronics and engineering goods suffered slowdown but they picked up momentum subsequently. Textiles, pharmaceuticals and leather were doing very good among the better performing sectors.
"The US economy has stabilized and the confidence level is very good. That is what is giving us a biggest growth. And also lately, the European Union has also stabilized. While emerging markets such as Latin America and others are also providing big opportunities, the only worrying thing for us now is China that is not picking up well. Our imports from China are much higher than our exports," said Rafeeque Ahmed.
The FIEO president said the dollar to rupee at 60-62 would help Indian exporters to compete better in the market. The Federation expects the dollar to rupee will hover at around 62-64 over the next 3-4 months.
Source:- economictimes.indiatimes.com
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