Exporters body Federation of Indian Export Organisations (FIEO) has sought immediate intervention of the government and the Reserve Bank of India (RBI) to resolve payment mechanism issues for Iran and flow of credit to push shipments. FIEO President Ganesh Kumar Gupta said a clarity is required on product coverage under a rupee-based payment mechanism to Iran.
Gupta said the understanding of trade is that if the end use of product is not under the sanctioned list, or exports is not to the Iranian government, it should be allowed for exports under the Rupee Trade Mechanism. He said “a clarification will help exporters to take such orders and push for quantum jump in our exports to Iran.” He pointed out that banks have expressed their inability to handle documents of exporters for shipments to Central Asian countries, if there is a reference to Bandar Abbas as a transit port in Iran.
Talking about flow of credit to export sector, FIEO President said that there is an about 50 percent drop in export credit in August as compared to the same month last year. He noted that MSME exporters are the worst sufferer and the lack of credit equally affects export performance. He added that there is a need for increasing the flow of credit to export sector by encouraging banks and also ensuring online filing, processing and monitoring of export credit.
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