Rail, road connectivity to top Board of Trade agenda

The issue of better rail and road connectivity from export clusters to ports and airports at the state-level is expected to top the agenda during the April 6 meeting of the Board of Trade (BoT), headed by Commerce and Industry Minister Nirmala Sitharaman, officials said.

The board is meeting to evolve steps to boost India’s exports and will discuss the recent cutback in government aid for export marketing under the Market Access Initiative Scheme and problems faced by exporters in getting refund of duty and taxes from the government.

“Earlier the commerce department was looking at bridging the gaps in export-related infrastructure through the Assistance to States for Infrastructure Development of Exports (ASIDE) Scheme. Now the allocation for the ASIDE Scheme is practically nil and subsequent to higher allocation to the States in the Central taxes (in accordance with the Finance Commission’s suggestion), it has been left to the States to fund such infrastructure projects,” said S C Ralhan, president of the Federation of Indian Export Organisations President, the apex body for exporters.

Many States face shortage of funds or have different priorities and they neglect export-related infrastructure, he said. “This has in turn added to the logistics cost for exporters.”

The BoT was reconstituted on March 23. It comprises representatives from the concerned ministries and from leading companies belonging mainly to export-oriented sectors, besides export promotion councils, industry chambers and trade experts.

The infrastructure-related issues will be taken up especially since the BoT comprises secretaries of the ministries of shipping, aviation and surface transport as well as the heads of National Highways Authority of India, Railway Board and the Container Corporation of India. During the meeting of the (Centre-State) Council for Trade Development and Promotion in January 2016, it was pointed out that ‘poor (export-related) infrastructure’ was the top-most factor hampering exports, and that the role of the states was crucial in addressing this.

Besides, engineering exporters will raise their concern over the Minimum Import Price (MIP) on 173 steel items, which they said has led to a major increase in their raw material costs and was therefore hurting engineering exports. Though the government had said the MIP will not be applicable to imports under the Advance Authorisation Scheme (AAS), EEPC India said the AAS was not used by the small exporters and had sought a price reimbursement mechanism.

Also slated for discussion is a proposal to grant interest subsidy on pre and post-shipment rupee export credit to merchant exporters (who procure goods from manufacturers for exports) from sectors such as handicrafts, carpets and agriculture.

Export Promotion Councils and FIEO have been officially informed that they would be given lesser Market Access Initiative (MAI) Scheme support, a move they said will hurt small exporters who rely on such assistance to participate in reputed international fairs and get more export orders, especially during a global trade slowdown.

Indian exports have declined from $314 billion in FY’14 to $310 billion in FY’15. Exports in FY’16 are expected to shrink further to around $260 billion.