The apex body of exporters also said that India can export an additional $5 billion to Russia if the payment mechanism is put in place and logistics issues resolved.
“While SBI is the bank identified here, Russia will soon identify a bank for rupee trade. We have a good rupee payment mechanism in Iran, so same thing will happen (with Russia) ,” said A Sakthivel, FIEO president at an event.
Ajay Sahai, director general, FIEO said that Russia could identify the bank in the next 15 days.
In April-July 2022-23, India’s exports to Russia were $714.35 million and imports were $13.37 billion.
The organisation also expects exports to pickup October onwards as India would benefit from Rupee depreciation and buyers move away from China as it is becoming costlier and less reliable to manufacture there with a zero Covid tolerance policy. It expects the country to clock $470 billion in goods exports in FY23.
On India’s export scenario, Sahai said that demand for low value products is increasing but volumes seem to remain intact. The WTO has already revised its forecast for the global trade to 3% from 4.7% in April and FIEO expects a further downward revision in October.
“China is becoming costlier and less reliable with a zero covid tolerance policy and anti – China sentiments are gaining ground day by day. Lot of orders for low value products, which were a virtual monopoly of China, are now coming to India,” FIEO said.
On the production linked incentive scheme for the textile sector, Sakthivel said that after technical textiles and manmade fibre, the government is looking at incentives for more sub-sectors with relaxed investment and turnover criteria of Rs 25 crore and Rs 50 crore, respectively.
“Uniqlo is in talks with the textiles ministry to have one complete PM Mitra park (for its operations),” Sakthivel told reporters.
While there are inquiries from the UAE and Australia, with whom India has inked trade pacts, the FIEO officials said that India might allow imports of barrels of whiskey from the UK instead of bottles as part of the trade agreement being negotiated.
FIEO said 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 and increase the incentives under Interest Equalisation scheme to 5% for manufacturer
exporters and 3% for merchant exporters.