Expressing concerns over India’s institutional frameworks currently not being geared to recognise risks of overseas markets, Commerce Secretary, Ms Rita A. Teaotia said that there is a pressing need for India to devise the kind of policy framework needed to address issues of finance to exports.
“We need to actually gear up not just the regulatory frameworks to address the precise needs of export finance and institutions serving export markets but also look at the costs of being able to serve smaller organisations using technology, using better tools in order to bring down the costs of actually extending credit to MSME sector,” said Ms Rita Teaotia while inaugurating an ASSOCHAM conference on ‘Role of trade finance for inclusive growth,’ held in Mumbai.
“There is a very large challenge for SME sector, which is actually a very large number of our exporters. The availability of finance and export finance is even more constrained, this is something which affects the competitiveness of India’s exports and unless we address this challenge we are not going to be able to become a significant global player,” said Ms Teaotia.
Lamenting that India has been opposing discussions on new issues like e-commerce, SMEs, gender, investment at the World Trade Organisation (WTO), she said “Why have we done this? It is relevant to us. These are important issues, we recognise, e-commerce is something we want to profit by, we want our companies to grow, we want our sellers to sell on e-commerce, we are an SME dominated country, we want those companies to prosper.”
She also stressed upon the need to gear up the banking policy and financial institutions to serve the needs of smaller manufacturers, service sector companies and exporters.
“There has been a lot of thinking about this, but really gearing up institutional framework for that and actually having some kind of assessment of how we are moving forward and ensuring that we are moving in the right directions perhaps that pace we need to put in place,” said the Commerce Secretary.
She said that Ministry of Commerce provides both guarantees and insurance cover for export finance through various schemes like Merchandise Exports from India Scheme (MEIS). “These cannot alone make a difference and it is necessary for the banking sector and the financial institutions to be more sensitive to these sectors.”
Ms Teaotia also said that India must look at sectors where it has the potential to be a champion. “Our focus in terms of policy, initiative and effort is on actually improving the competitiveness of Indian products and Indian industry.”