Stumbling at every hurdle

Incidentally, Divan, who quit his lucrative job in a multinational firm to set up the export firm is now regretting his decision. quot;There is no synergy in the Indiangovernment8217;s fiscal, banking, finance and infrastructural policies,quot; he said. He is also not satisfied with the 20 per cent depreciation of the rupee from 35.70 to 42.50 in the last one year exporters8217; earnings go up when the rupee depreciates against the dollar. However, the currencies of other Asian countries had fallen by 40 to 80 per cent making their goods cheaper.

Interestingly, in the last fiscal, exporters earned more from rupee depreciation from their EEFC Export Earning Foreign Currency accounts instead of actual exports. Indeed, the rupee fall against the dollar in the last one year has come as a relief to exporters. But they want further depreciation of the currency.

Indian exports are going through one of its worst phases if the statistics of the Ministry of Commerce for the first quarter of fiscal 1999 is any indication. After slowing down in the last two fiscals, the export growth has finally turned negative and in the coming months the scenario is set to turn bleak. In May alone,exports showed a negative growth of 17.22 per cent, a far cry indeed for the government which was looking for an export growth of 20 per cent.

But exporters are not worried about this. They are more concerned about taking the goods to the port and getting clearances at various stages. quot;Almost 10 per cent of my export earnings are paid as bribes to government officials,quot; Shah said.

It was, therefore, not surprising that Union commerce minister, Ramakrishna Hegde, castigated the customs and excise officials for unnecessarily delaying country8217;s exports in a recent meeting in Mumbai. Is this enough?

Says Ramu Deora, President of the Federation of Indian Exporters Organisation FIEO: quot;I will not be surprised if exports hit an all-time low in the current fiscal. Infrastructure bottlenecks will take a long time to sort out, and it will take some time before the exports really pick up.quot;

The FIEO chief says more roads and storage facilities will have to be built to take goods to the ports quickly. quot;Even inthe ports things are going from bad to worse. You to have to wait for several days for the final shipment to take place,quot; Divan said.

The perennial complaint of exporters is that many a time they are unable to send consignments due to lack of shipping facilities. A Calcutta-based exporter waited for a Shipping Corporation of India vessel to berth for more than three months to export jute products to Cyprus even as his competitors in Bangla Desh corroded his orders. The exporter had to come all the way to Mumbai to attend a FIEO seminar with the Commerce Minister to find a solution.

The constant fluctuation in the rupee8217;s value is also worrying the exporters. They would like the rupee to touch Rs 45 to a dollar considering the devaluation in the neighbouring currencies. quot;Instead of using a flat rate of Rs 40 per dollar, the rate prevailing on the day of exports of the exporter should be taken as the rate for conversion for calculating incremental exports. We are looking forward to an exchange rate whichtakes into account the rising rate of inflation in the country,quot; said a Chemexcil official, adding quot;the RBI should pursue a policy based on the devalued rates in other countries to fix the exchange rates.quot;

Shah had to recently cancel an export order as he found the bank finance much more expensive than the profits he would have earned from the export. He bitterly complains that the Reserve Bank of India and Finance Ministry are yet to take any suitable steps on this front. quot;Raw material and finance for production of goods for exports should be provided at international prices,quot; said Y. P. Trivedi, President, Indian Merchants Chamber.

On the other hand, though the ministers and bureaucrats talk endlessly about lack of ports, ships and roads, they are unable to do anything as massive investments is required to build infrastructure. With problems mounting, the Commerce Minister, Ramakrishna Hegde said: quot;It would be difficult to meet the export targets for the current fiscal given the currentcircumstances.quot;

Exporters complain that exports were affected in the last few years due to falling South-East Asian currencies coupled with the slowdown in Indian economy. quot;South-East Asian countries like Malaysia, Thailand, South Korea and Singapore are flooding the markets with cheap goods. How will we compete with them? We should have an overall strategy taking into account the WTO requirements,quot; Deora said.

Besides, the bureaucracy is bent on inventing new problems for the exporting community. quot;If the government can control its officials with whom we are interacting on a day to day basis, half our problems could be solved,quot; said a Tirupur-based exporter, adding, quot;many times, these officials have challenged us to go to any level after stopping our consignments.quot;

Last year, there was an extraordinary increase in exports of primary products like wheat, rice, sugar and marine products. This year these sectors are stagnating. Leather exports, which were sizable last year, have slowed down. This is due tothe pollution threat this year, resulting in shutting the down of many tanneries.

The small-scale sector which contributes 50 per cent of Indian exports, like leather and spices, is not financially sound to install requisite effluent treatment plants at their factory sites. The traditional markets of Europe have registered a negative growth rate of 1.21 per cent during the previous year, leaving less room for exports.

Issues relating to brand management and strategic international marketing are of immense importance and can boost exports. There are companies which benefited from such moves.

Says Chairman of Rs 1,333 crore Ranbaxy Laboratories, Parvinder Singh: quot;Our exports in the first quarter of the current fiscal have gone up by 20 per cent to Rs 126 crore as we are exporting to our own plants abroad. Our focus in the future would be to build strong brands abroad.quot; Despite the economic slowdown, Ranbaxy exported products worth Rs 595 crore in the fiscal 1998.

Another factor which is worryingexporters is political uncertainty. Even if some measures are announced, the pace is agonisingly slow. For example, India urgently needs two world-class big ports. Although an announcement was made by the then Cabinet Secretary to clear proposals for two mega ports on both coasts more than a year ago, no progress has been made so far.