Plan for quick liquidity to tariff-hit exporters

Why in News?

Recently, the government has come up with an “action plan” to respond to the tariff escalation by the U.S., aimed at addressing the short-term pain points, long-term competitiveness.

• Plan framed by – Department of Commerce
• Guiding principles – Based on providing immediate relief to exporters with regard to liquidity, compliances, and order levels.
  • Building resilience in supply chains,
  • Leveraging existing trade agreements,
  • Providing other non-financial assistance to exporters.
• Major concern for exporters
• Liquidity crunch – Exporters face shortage of trade finance as they have already purchased stock meant for exports (especially to the U.S.).
• Fall in orders – Risk of drop in order levels, especially in SEZ-based units which are key for labor-intensive exports.
• Government’s Response & Export Promotion Mission (EPM)
• Niryat Protsahan (Financial Support for Exporters)
  • Interest subvention schemes to make trade finance cheaper.
  • E-commerce export cards for easier access to digital trade systems.
  • Collateral support for exporters to secure loans.
• Niryat Disha (Market Access & Capability Building)
  • Support for export compliance.
  • Branding, packaging, and marketing assistance.
  • Logistics and warehousing support.
  • Trade intelligence to identify new opportunities.
  • Skilling initiatives for exporters and workers.
• SEZ Policy Flexibility – Considering greater flexibility in SEZ norms to help sustain production and scale.
• Supply Chain Resilience Measures
  • Establishment of e-commerce export hubs with simplified return logistics.
  • Easier inter-state movement of goods.
  • Faster GST refunds to improve liquidity.
• The medium and long-term strategy – This includes leveraging the existing Free Trade Agreements that India has signed,
  • Export diversification,
  • Establishing strategic autonomy is crucial sectors,
  • Creating digital trade infrastructure in the form of the BharatTradeNet (BTN).

Reference

The Hindu| Plan for quick liquidity to tariff-hit exporters