Apex export body FIEO outlines 'Issues and Challenges in International trade' for India

New Delhi: The Federation of Indian Export Organisations (FIEO) on Wednesday held a press conference on "Issues and Challenges in International Trade" with a focus on India's Exports and its Future Prospects" in New Delhi.

The apex body of exporters discussed several issues and challenges in international trade concerned by India's exports. Some of the key issue discussed in the presser were Global Trade Scenario and Indian Exports, Rupee depreciation, Liquidity and interest rates, Indian Rupee Trade Mechanism, GSP loss in EU particularly, Services, E-Commerce and  Foreign Trade Policy.

Issues and Challenges in International trade concerned with India's exports 

Talking about the Global Trade Scenario and Indian Exports FIEO said, "Global trade is facing headwinds more so after the Russia-Ukraine war had a huge impact on global crude and food prices. This will affect our exports in two ways: (i) the value of raw materials exports will come down and (ii) the value of the final product manufactured out of such raw material will also be lowered since the input prices have declined."

In a statment, the FIEO maintained that the demand for liquidity has gone up as buyers are delaying the payments and asking exporters to withhold further shipments or release small quantities of such shipments. "There is a need to extend further credit to the export sector by automatically enhancing the limits by 20% or so as given under the Gold Card scheme, at least to the established exporters", the export body added.

Talking about the issues related to exports to Iran and Russia, the apex body said, "A related issue is the logistics for exports to Russia. We are very happy that the Government is considering using the INSTC route to reach Russia. The route reduces the voyage time and the cost. Unfortunately, the Indian banks are reluctant to negotiate any document when goods touch Iran, being a sanctioned country. Therefore, some clear instructions need to be given to the banks to negotiate the documents for goods routed through Iran with ultimate destination as Russia or CIS which is clearly available in the combined transport bill of lading."

Giving special attention to the issue concerned with e-commerce retail, the Apex body said that "e-commerce retail exports, which has a potential of 10x multiplier in 3 years, needs to be encouraged by addressing various regulatory issues and providing them at least the same benefits which are available to the merchandise sector."

The top export body listed out several issues related to the e-Commerce and Cross Border trade: 

Banking

• Non-availability of pre-shipment and post-shipment export credit to e-com exports as such exporters do not have export orders sought by the banks for providing pre-shipment and post-shipment credit
• Non-availability of interest equalization scheme, owing to the reason stated above, is a major concern for such exporters as many of them are manufacturers falling in MSME or covered under 410 tariff lines for which such scheme exists.
• Challenges in exports to warehouses of service providers overseas where the value declared on the shipping bill varies from the final realization.
• High eBRC charges particularly for small value shipments of Rs.25,000 – 50,000/-.
• Short realization of Rs.200-300 on account of bank charges resulting in pending EDPMS

Customs

• Alignment of limits permitted by RBI with limits under courier shipping bill and bill of exports.
• Extension of e-com exports to major international airports/FPOs
• Flow of export shipment details from FPOs/courier terminals to Icegate
• Challenges in re-import of exported goods as identification remains a major concern

Foreign Post Offices

• Lack of facility of “Proof on Delivery” in many countries depriving exporters to contest the claim of customers about non receipt of goods
• Integration of Postal Bill of Exports with Icegate

DGFT

• A separate Chapter for e-Commerce Cross Border Trade
• Development of integrated e-Commerce Parks. Such parks should provide comprehensive facilities such as banks/fintech companies, foreign post offices/courier terminals, logistics companies, warehouses, customs, tax refund, all under a single umbrella. Some space can be earmarked for packaging and small operations as well.
• Settlement of pending claims of MEIS to eligible e-com exporters