Piyush Goyal Says Finance Ecosystem for Exports Should be a Priority for Lenders

Strengthening the financing architecture for project exports through innovative financing instruments and relooking regulations such as prudential norms for export credit agencies should be a priority, said Mr. Piyush Goyal, Hon’ble Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution, and Textiles, Government of India, during a summit organized by the Export-Import Bank of India (Exim Bank) on the theme ‘Enhancing Global Opportunities for Indian Project Exporters’ on 5th May 2022, in New Delhi. The Summit had participation from representatives from Government of India, foreign diplomatic missions in India, multilateral financing institutions, development financing institutions, export credit agencies, credit insurance agencies, and Indian companies, among others. The Summit was attended by more than 150 participants.

Addressing the participants in the Summit, Mr. Goyal highlighted the remarkable resilience of Indian exporters despite the pandemic induced disruptions. Mr. Goyal noted that the country is heading towards achievement of the larger objective of US$ 1 trillion of exports in goods and services each, and nascent sectors such as project exports would be critical for this.

Informing the participants about the Government of India’s commitment to enhance market access through free trade agreements (FTAs), Mr. Goyal invited stakeholders to highlight the non-tariff barriers that they face in important project markets, so that these could be effectively addressed in FTA negotiations. Highlighting the substantial opportunities in developed markets for project exports and need for diversification into these markets, Mr. Goyal urged project exporters to identify market access issues in these markets that can be addressed by the Government. 

During the Summit, Mr. Goyal also released an Exim Bank Study titled, “Project Exports from India: Tapping potential amid Changing Dynamics”, and commended India Exim Bank for undertaking research on this niche area. Based on stakeholder consultations and desk research, the Study provides a broad perspective on the current scenario of project exports from India, undertakes a comparative analysis of the strengths and weaknesses of Indian companies, reviews the impact of Covid-19 pandemic, and recommends pertinent strategies for boosting project exports from the country. Mr. Goyal also released another Exim Bank Study on the subject, titled ‘India’s Engagements in Free Trade Agreements: Looking Ahead’ during the Summit, which assesses India’s major trade agreements and their impact on India’s trade.

During her inaugural address, Ms. Rupa Dutta, Principal Economic Advisor, Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India, commended the timeliness of the Summit given the large rounds of infrastructure investments being made by countries all across the world, and the likely opportunities that may emerge for project exporters. 

In her address, Ms. Harsha Bangari, Managing Director, Exim Bank, highlighted some of the challenges for project exports that emanated during the deliberations in the last edition of the Summit in 2019, and the progress made in addressing these challenges. These measures, included inter alia inclusion of provisions for co-financing of projects in IDEAS guidelines, addressing the need for Euro financing, addition of escrow mechanism as an additional security measure, and implementation of an ESG policy to give preference to green and socially sustainable projects. 

Summarising the proceedings of the Summit in his Vote of Thanks, Mr. N. Ramesh, Deputy Managing Director, Exim Bank, reiterated the key themes emerging from the discussions, including the need for greater collaboration, aligning the priorities of the industry with that of the Government of India, and need for addressing non-tariff barriers to projects exports through FTAs, among others.