Former union minister Suresh Prabhu has exhorted domestic exporters to identify niche markets and key products for shipments at a time when the the global market is going through a severe crisis due to COVID-19.
In view of the present pandemic crisis, he said, the first and foremost work for exporters is to find the markets where demand support is given by their respective governments through a package, citing examples of the US and Europe.
"Both domestic and international markets are going through its worst-ever crisis, therefore the role of the exports sector becomes critical at this juncture. There is a need to identify niche markets and key products for exports which is the need of the hour," he said in a virtual interaction with the Federation of Indian Export Organisations (FIEO) members yesterday.
Elaborating on the issues and challenges being faced by the Indian exporters, he said easy access and availability of credit has been a key concern and the Reserve Bank needs to consider exports under private sector lending and ensure that the banking system properly caters to the sector.
"The Reserve Bank of India may create an external market sensitive credit facility for exporters through banks and ensure banks don't charge at a higher rate for this service, which would further ensure access to low-cost finance," Prabhu said.
He also said that to increase export competitiveness, sectoral studies can be conducted to identify and address key bottlenecks in the economy.
Focus needs to be laid on redefining subsidies besides aggressively supporting merchant exporters in marketing their products in such globally competitive markets, Prabhu, who is also India's Sherpa to the G-20 summit, said.
FIEO President Sharad Kumar Saraf said the COVID-19 pandemic has impacted both Indian exports and the economy on a larger scale, and its repercussions on the country could well be felt now as trade and industry operations have yet not started at full capacity.
With major economies including China, US, Europe almost fully operational now, India's trade and industry should be supported in a big way to start operations so that not only the country's exports are least impacted but also whole supply chain disruptions are overcome, Saraf said.
Expressing concerns that global trade is under the element of uncertainty, FIEO Director General Ajay Sahai said economies across the world are entering into a recession.
As per WTO estimates, global trade may plummet between 13-32 per cent with further downward revision and recoveries in the trade will depend upon policy initiatives that the countries are adopting, Sahai said.
"With exports estimated to decline by 20 per cent or more during the current fiscal, we may see a reduction of USD 200 billion on the imports and remittances front," he added.