MUMBAI, August 8: Bankers and exporters failed to reach a consensus on the measures to be taken to reverse the negative trend in exports growth. The Federation of India Export Organisation's summit on "Role of banks in promoting exports", held in Mumbai on Saturday, turned out to be yet another futile exercise to find ways to prop up the sagging exports as both the communities spoke in different languages.The seminar, chaired by State Bank of India chairman MS Verma, was attended by CEOs of all leading public sector banks and senior Reserve Bank officials besides various export organisations.While FIEO president Ramu S Deora identified the high transaction costs and complicated procedures as the main reason behind India's pathetic performance on the export front, Verma contested the claim flatly saying one has to look for other reasons for exports slowdown."By changing procedures, what we will be able to get is only some incremental advantage. To change growth rate we have to look at strategic issuesrather than the procedural ones," the SBI chief said. He placed the slowdown in export growth to strategic inadequacies in India's exports basket and inability to find alternate markets in the changed global scenario."Our export basket is not right. It consists mostly of commodities and some engineering goods with services featuring very little among what we export. World over, it is the other way with services occupying the fastest growing slot in exports," he said. Most of the Indian exports are in the low-value added commodities while growth in exports will only come from value-added products that can compete in developed markets. "The first question that we should answer is how do we go up in the value chain," Verma said.FIEO's Deora kicked off the discussion saying it is the transaction cost that should be addressed now to reach the 20 per cent targeted export growth rate as the long-pending issue of interest rates have been sorted out. Verma was quick to responded saying these are minor issuesthat can be addressed at a later stage and the immediate issue is how to address reasons for export registering a drop and how it can be turned around.Responding to the numerous suggestions from Deora about bringing in uniformity of pricing of various export services by the banks, Verma said any attempt to fix pricing is retrograde and counter productive and should be resisted. Pricing, he said, is related to the cost of different market operators. "Let us leave pricing of services to the open market," he said.The exporters, represented by various export promotion councils and associations, however, had come prepared to discuss and sort out numerous procedural issues in availing bank credit. They continued their presentation along those paths, giving little heed to the path which Verma had wanted to chart out.Verma had raised the issue of changing direction in situations like the South East Asian crisis. India had about 20 per cent of its exports to this region, which is now in total disarray. If oneof the option is to focus on other markets, especially developed markets, "what is the state of our preparedness," Verma asked.The exporters persisted with the micro issues of procedural hassles in getting bank credits, despite Verma stating that he and other bank chairmen could address most of these issues in a closed-door meeting.
