Indian exporters demand fiscal support and credit at reasonable rates in the FY24 Budget during the pre-budget meeting Exporters asked on Thursday that the upcoming budget include policies to increase exports and support job creation, such as the creation of a fund and credit at reasonable rates.
The Federation of Indian Export Organizations (FIEO) said the depreciation of the rupee against the US dollar is impacting exports' competitiveness and as a result, the industry needs additional support in a pre-budget meeting with Finance Minister Nirmala Sitharaman.
"The largest difficulty the nation has is employment creation. "Creation of employment is the biggest challenge faced by the country....
We would urge the government to provide fiscal support to units that provide additional employment in the export sector. Such a scheme will also help workers move from informal employment to formal employment," added the federation.
According to the statement, incentives may be given based on both the growth of workers and exports, so that when exports increase, employment-intensive units also benefit. It was also noted that when global demand is dropping, active marketing is even more important.
However, the majority of Indian companies are reducing their marketing spending in view of the recession, which might have an impact on the nation if Indian products are not noticeable on the market, according to FIEO.
"The assistance provided under the Market Development Assistance (MDA) scheme, with a total allocation of less than Rs 200 crore, is simply a drop in the ocean when it comes to promoting exports to USD 460-470 billion.
"Therefore, for aggressive marketing, there is a need for the creation of an Export Development Fund with a corpus of minimum 0.5 percent of preceding year's exports,"
In addition, a 200 percent tax deduction on exporters' out-of-country marketing expenses was requested. Regarding freight, it was reported that in 2021, Indian exporters paid USD 82.65 billion in transport service charges.
"When we are looking at increasing our international trade to USD 2 trillion in an economy of USD 5 trillion, the outgo on transport services will increase to USD 150-200 billion. If an Indian shipping line gets only 25 percent of such a market, we can save USD 40-50 billion every year, "It stated.