The commerce ministry is closely working with the finance ministry to ease credit flow to the export sector, commerce and industry minister Suresh Prabhu said on Tuesday. “One of the main challenges for export is finance. There is a decline in (export) finance, so we have taken up the issue with the finance ministry…I think, the finance minister is also looking into this (as in) how we can improve the credit flow into the export sector,” Prabhu said.
Federation of Indian Export Organisations (FIEO) President Ganesh Gupta has been seeking adequate credit to exporters on grounds that lack of adequate loans would crimp the growth of exports. India’s exports have been hovering around $300 billion a year since 2011-12, without substantial growth.
Export credit provided by banks fell sharply by about 51.3 per cent to Rs 22,300 crore as of September 28 from a year earlier. This is despite the fact that total lending to the priority-sector rose 6.6 per cent, latest data from the Reserve Bank of India showed. Overall non-food credit witnessed a rise of 11.3 per cent up to September 28. The persistent decline in export credit, especially to small players in the current year so far has raised fresh concerns about adequate financial support to exporters. FE