To take Indian economy to 1 trillion dollar exports in goods, and 1 trillion dollar exports in services in the next five years, the Commerce Minister reiterated the importance of availability of credit at low rate of interest. He emphasised that it is the joint responsibility of banks and Government to ensure that export credit at competitive rates are available to businesses. The Commerce Minister pointed out that the volume of export credit is on a declining trend for the last few years and the situation needs urgent measures. Piyush Goyal put forth the proposal to make credit in foreign currency available to exporters at London Inter-bank Offered Rate (LIBOR) plus maximum 200 basis points and directed RBI, ECGC and other banks to work out the modalities to make it possible.

Union Minister of Commerce and Industry & Railways, Piyush Goyal, today chaired a meeting with the participants from various public and private sector banks, RBI, EXIM bank, exporters organisations to look into the issues pertaining to export credit sector. Ministers for State for Commerce and Industry, Hardeep Puri and Som Parkash were also present in the meeting.

The Commerce and Industry Minister also deliberated on the interest subvention scheme utilisation with the participants and stressed on the importance of finding ways to maximise the impact of such subvention. He suggested that the subvention scheme may be used better as backstop guarantee for credit, thus increasing the coverage of ECGC for export lending purposes. The Minister asked RBI, EXIM Bank and SBI to study the matter in detail and present it in the follow up meeting to be held on 30^th June 2019 in Mumbai.

Various other issues were deliberated in the daylong meeting, including bank coverage charges, exports to Iran, processing fee, collateral requirements and loan disbursals. Piyush Goyal directed the concerned departments and participants to take note and come up with solutions in a time bound manner. Various issues raised by exporters associations were resolved in the course of the meeting with directions to the concerned departments.

The Federation of Indian Export Organisations (FIEO) has been asked to submit a report within 30 days on the following issues:

• Shift from subsidy to cheaper availability of loan in foreign currency to exporters by 30^th June 2019.
• ECGC to enable a credit guarantee cover foreign currency lending to MSMEs.
• EXIM bank to provide refinance in foreign currency to the commercial banks to support export credit particularly to MSMEs.
• ECGC to extend export factoring for MSMEs.
• Simplification of banking procedures for exports.

The Reserve Bank of India (RBI) has been asked to look into USD 25 billion line of credit from its foreign currency reserves for swap to well performing banks, and to also look into priorty sector lending norms for export credit. Concerned departments have been asked to provide details for improving gold card scheme for export credit to be submitted to RBI. All these proposals will be discussed again and finalized in the June 30^th, 2019 meeting to be held in Mumbai.

The meeting was attended by the representatives of the Ministry of Finance, Department of Economic Affairs, Department of Financial Services, Commerce Secretary, Anup Wadhawan, Secretary MSME, Dr. Arun Kumar Panda, Director General of Foreign Trade, Alok Vardhan Chaturvedi and senior officials of the Department of Commerce, officials from RBI, State Bank of India, Canara Bank, Punjab National Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank, Barclays Bank, Citi India, Bank of America, EXIM Bank, ECGC, Indian Banks’ Association, FIEO, EEPC, GJEPC, Laghu Udyog Bharati, FICCI and CII.

Export credit availability: directive to ensure competitive foreign currency lending, guarantee cover and refinance support for exporters. Availability of export credit at competitive rates was made a policy priority, directing coordinated action by banks, RBI, EXIM Bank and ECGC to restore and expand foreign currency lending to exporters, propose competitive floating rate lending with limited spread, use interest subvention as a backstop to broaden guarantee coverage, and study refinance and swap options from foreign currency reserves to support bank lending.