Boost to Indian Exports
Q. Indian Exports can be given a boost by which of the following ways?
1) Indian Gold Reserves
2) Tax Exemptions
3) India’s Foreign Exchange- Published on 15 Apr 16a. 2
b. 1, 3
c. 1, 2
d. All of the above
ANSWER: All of the above
- The Commerce Ministry wants the central bank, RBI to use a part of its foreign exchange reserves to give long-term loans at low interest rate to the Exim Bank of India, which can pass it on to exporters at lower rates than bank credit.
- The aim is to help reduce the costs and enhance the competitiveness of exporters at a time of global trade slowdown and weak demand overseas.
- Apart from these measures, tax exemptions and subsidies too can help in boosting exports.
- Indian Gold Reserves can be used to provide long term loans to the exporters. They are most useful in case of jewelers who import gold for value addition and exports.
- Rate of export credit in India is between 11 and 12 per cent as against 2-3 per cent in the Euro area (except Greece), 2.6 per cent in Taiwan, 4.6 per cent in Thailand, 5.5 per cent in China and 6.2 per cent in Malaysia.
- The Commerce Ministry had also supported a proposal of categorizing the entire export credit given by all lenders separately under priority sector lending without much riders to help bring down the cost of credit for exporters.
