Commerce Minister Suresh Prabhu has raised the issue of declining export credit with Finance Minister Arun Jaitley, suggesting that loans to exporters should be considered as priority sector lending by the banks.
In a letter to the finance minister, Prabhu said the "sharp decline" in export credit is impacting exporters in general and MSME units in particular.
Citing RBI data, the commerce minister stated that outstanding export credit has come down to Rs 22,300 crore on June 22 this year from Rs 39,000 crore as on June 23 last year.
Similarly, the outstanding export credit which stood at Rs 28,300 crore as on March 30 has come down to Rs 22,300 crore as on June 22 this year, a decline of 21.1 per cent in this fiscal.
Prabhu urged the finance minister to consider "export credit to be included as part of the priority sector lending by banks".
The Federation of Indian Export Organisations (FIEO) has said that even renewal of limits has become problematic for the sector, even in respect of companies having excellent track record.
"I request you to kindly have suitable instructions issued to banks to restore the flow of credit to the export sector to its expected regular levels, based on the required increase over recent peak levels, to factor in export growth currently taking place," Prabhu said in his letter.
He also urged for strict timelines for grant of credit including the renewal of limits.
Since 2011-12, India's exports have been hovering at around USD 300 billion. During 2017-18, the shipments grew by about 10 per cent to USD 303 billion.
Promoting exports helps a country to create jobs, boost manufacturing and earn more foreign exchange.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)