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Monday, February 26, 2024

EEPC India proposes cheaper export finance for MSMEs

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Kolkata: EEPC India chairman Mahesh Desai has proposed to withdraw export duty on selected steel items as it will be especially helpful for the MSMEs which have a significant contribution in India’s engineering exports.

Cheaper advances for MSMEs, a dedicated PLI scheme for MSME sector, guidelines for Rupee trade with Russia and alternative payment mechanism for Myanmar were some of the key suggestions by EEPC India during a meeting of the Board of Trade held on Tuesday.

Participating in the meeting, EEPC India chairman Mahesh Desai also proposed to withdraw export duty on selected steel items as it will be especially helpful for the MSMEs which have a significant contribution in India’s engineering exports.

Desai cited the feedback received from member exporters and noted that imposition of export duty will dampen Indian interest and endanger the survival of Indian stainless-steel “SS” producers.

He requested the government to relook at the rates under RoDTEP and give full rebate on the taxes that still remain in the export production chain.

Desai recommended the inclusion of the steel sector under RoDTEP as steel is the most widely used raw material in the engineering industry.

He highlighted that when export incentives are being phased out, export finance has become increasingly important, especially for the MSMEs.

The EEPC India suggested that MSMEs should be offered advances at a rate that would be lower than MCLR (Marginal Cost of Funds Based Lending Rate) and RLLR (Repo Linked Loan Rate) so that they don’t run out of funds and can sustain business.

While appreciating the steps taken by RBI for facilitating Rupee-trade with Russia, Mr Desai called for sensitizing the banks regarding the process. He suggested that a clear set of guidelines in this regard would be of immense help for the exporting community.

He also raised EEPC India members’ concern that the Rupee-trade facility may not be extended to Myanmar as they are in the FATF list and urged the government to find some solutions.

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