FIEO raises Iran trade problems

The organisation has urged the govt to look into the possibility of raising the subsidy to 4.

Exporters body Federation of Indian Export Organisations FIEO today said it has taken up with Commerce Ministry the hurdles faced by exporters in getting insurance cover for their consignments to sanction hit Iran.

8220;Insurance companies are not extending the cover to consignments and we have flagged this issue with the Commerce Ministry,8221; FIEO Director General Ajay Sahai told reporters on the sidelines of an Assocham function here.

He said probably the issue is being discussed with the Finance Ministry.

8220;I have been given to understand that they Commerce Ministry have taken it up with the Finance Ministry and we are hopeful that it issue will be sorted out soon,8221; Sahai said.

In the backdrop of Iran facing sanctions from the US and Europe,Indian insurers are apprehensive of providing insurance cover to exports bound for the oil-rich nation.

Indian exporters were also facing problems of payment default in Iran following the sanctions.

India is Iran8217;s second-largest crude buyer,importing about 3,52,000 barrels per day bpd,or 13.5 per cent of Iran8217;s 2.6 million bpd of exports.

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According to sources,Indian public and private insurance companies are seeking sovereign guarantee before providing cover for the exports.

On interest subsidy,Sahai said that FIEO has made a case to the Commerce Ministry for extending the list of beneficiaries under the scheme for boosting country8217;s sagging exports.

8220;Though the benefit is available to Small and Medium Enterprises SMEs,the government has not extended it to other sectors,8221; he said.

Besides,Sahai said,the organisation has urged the government to look into the possibility of raising the subsidy to 4 per cent.

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Under the scheme,exporters engaged in areas such as toys,sports goods,processed agricultural products,ready-made garments,handicrafts,handloom,and micro,SMEs get loans with 2 per cent subvention.

During April-July 2012-13,the country8217;s exports have shrunk by 5.06 per cent to USD 97.6 billion as compared to last year on account of lower demand from the US and Europe.