Govt considering forex loan at cheaper rate to exporters, higher insurance cover to banks: Goyal

NEW DELHI: The government is considering a proposal to provide foreign exchange loan at cheaper interest rate to exporters and higher insurance coverage to the banks on their export-credit-disbursement, commerce and industry minister Piyush Goyal informed Parliament on Wednesday.

“The proposal is presently under consideration,” he said in a written reply to a question in Lok Sabha on whether the government proposes to provide foreign exchange loan at cheaper rate of interest to the exporters.

It is expected that it will enable banks to revise their lending rate for export credit and to provide foreign exchange loan at cheaper rate of interest, the minister added.


US-China standoff
Replying to a separate question, he said the current trade standoff between the US and China and the slowdown in international market is likely to have its impact on the imports and exports of countries, including India, and may bring about a shift in the bilateral trading patterns.

“The retaliatory tariffs between US and China have provided a limited window of opportunity for enhancing India's exports to China and US, particularly in products in which India is also competitive,” Goyal said, adding that India's exports to both the US and China have increased in 2018-19 as compared to 2017-18.

“While the exact degree to which this increase can be attributed to the impact of US-China trade standoff is not clearly discernible at this point, the increase can be partly attributed to the fact that certain Indian products have gained in the US market due to higher duties on competing Chinese products and vice-versa for the Chinese market,” he said.

Stating that the government has sensitised all the trade promotion bodies to work towards enhancing exports by capitalizing on this opportunity arising from the ongoing tariff standoff between the US and China, the minister said the extent to which India can capitalize on the opportunity depends upon a number of factors including the cost competitiveness of its products as compared to similar product of other competing countries in the Chinese and US markets, and other factors like generation of adequate exportable surpluses, market access.