The commerce and industry ministry is working on a mechanism that will make Indian exports to Africa as competitive as those from China. The ministry is launching a scheme that will help exporters bid more aggressively for projects. This is being seen as a route to increasing exports, which declined by 4 per cent in the April-February period of the current fiscal.
« We are launching a co-finance scheme for project exports in partnership with EXIM Bank. The bank will provide co-financing to exporters at cheaper rates that will make Indian companies more competitive. Initially, we are starting the scheme in African and Asian countries, » a government source told The Indian Express.
Several exporters have been demanding that the projects be co-financed so that they can bid more aggressively in emerging markets where China, that already provides such facilities to its exporters, has gained substantial access.
The co-financing scheme would be for high-ticket projects like road construction, and hydel power and it will also help in increasing the value in export earnings, the source added.
« We are staring it on a pilot basis. The finance ministry has already given a go ahead. Now the ministry is in discussion with the Planning Commission to see if the funding for providing a boost to exports can increase in the 12th Plan period, » the source said.
Operational guidelines are in the process of being issued by the EXIM Bank for project exports. The exporters will get an interest subvention of 2 per cent on such co-financing which will be provided at Libor plus 2.5 per cent for projects of five years, Libor plus 3 per cent for projects of 5-10 years, and Libor plus 3.5 per cent for projects of more than 10 years.
Source: India Express
