Exporters in Ludhiana have made a strong appeal to the Central government, urging a substantial increase in export incentives. They argue that the existing benefits are negligible and inadequate to offset the rising production and logistics costs that businesses are currently facing.
Industry Bodies Highlight Key Challenges
Industry bodies have emphasized that businesses are struggling with multiple financial burdens, including high power tariffs, elevated interest rates, and significant compliance expenses. These factors make it extremely difficult for Indian exporters to compete with countries that provide more aggressive state support to their industries.
Voices from the Industry
Badish Jindal, president of the World MSME Forum, stated that the current incentives are too small to make a meaningful impact, particularly for micro, small, and medium enterprises (MSMEs). He argued that if India aims to enhance its global competitiveness, policy support must be aligned with the actual costs of input prices and transportation. Without this crucial adjustment, he warned, it will remain extremely difficult for smaller firms to sustain their operations in the competitive international market.
SC Ralhan, president of the Federation of Indian Export Organisations, emphasized the urgent need for export loans at lower interest rates. He noted that access to affordable credit is essential for Indian exporters to stand at par with their international competitors, who often benefit from more favorable financial conditions.
Inadequate Relief from Existing Schemes
Industry leaders pointed out that while government schemes like duty drawback and the Remission of Duties and Taxes on Exported Products (RoDTEP) were designed to neutralize taxes, the actual rates for many products remain too low to provide real relief. Exporter Sarabjit Singh described the current benefits as "paltry," providing a concrete example from the steel sector. He noted that a duty drawback of Rs 1.5 per kg does not even cover the cost of a single truck's transportation, highlighting the stark inadequacy of the support.
Singh suggested that the government should consider reintroducing tax-free export benefits for MSMEs. This move, he believes, could encourage new firms to enter the market and bolster India's export capabilities, fostering growth and innovation in the sector.
Call for Timely Disbursement
Beyond higher incentive rates, the industry is also calling for the timely disbursement of these benefits. Faster processing is seen as vital for improving cash flow for MSMEs, which often operate on thin margins and cannot afford long delays in receiving government support. Delays in disbursement can severely impact their ability to manage day-to-day operations and invest in future growth.
Broader Implications
The demands from Ludhiana exporters reflect a broader concern within India's export community. As global trade dynamics evolve, the need for robust and responsive policy measures becomes increasingly critical. Enhancing export incentives and ensuring their efficient delivery could play a key role in strengthening India's position in the international market, supporting job creation, and driving economic development.
In summary, the call from Ludhiana exporters underscores the urgent need for policy reforms that address the real challenges faced by businesses. By increasing incentives, lowering interest rates on export loans, and ensuring timely disbursements, the government can help MSMEs overcome cost pressures and compete more effectively on the global stage.
