The Hindu Business Line : Export promotion strategy lacks focus

UNDETERRED by the general panning that the authors of the report on a medium -term export strategy received, Udyog Bhavan is at work again. This time, on promoting export delegations.

Even before the ink on the report — which some critics have sought to dismiss off as `` sweet nothings '' — barely dried, the Ministry is pushing for export delegations to focus markets. The trouble is that the report is peppered with the word `focus' in so many areas that the only countries, which have been left out seem to be — Pakistan, Bangladesh and Nepal.

Be that as it may, Udyog Bhavan, in keeping with its serious intent, is planning to fan out delegations of exporters to Latin America, European Union, the US, Eastern Europe, Africa and China. The word has been spread to export processing zones, presumably to get exporters in for this exercise. The surprise is, however, that babus in the Ministry will be left out of these expeditions.

The delegations, which will be supported by the Government through its market development assistance programme, are aimed more at helping the smaller players in the export business to attend international fairs and to meet up with potential buyers. The report on medium term export strategy talks about the need for market development programmes to focus on enhanced funding for existing promotion activities. These include trade fairs, trade missions, buyer-seller meets and the like. Since export promotion agencies do this on a sustained basis, one is tempted to ask- what is new.

Sample another bald sentence from the report- The Indian missions abroad and export promotion councils and commodity boards need to be further activated.

How? There are no suggestions on offer.

Interestingly, when the External Affairs Minister, Mr Jaswant Singh, sent out letters to Indian Foreign Service officers, almost in the Kumarakom musings style of the Prime Minister on the challenges being faced by the foreign office, some of them did come out bold.

A major failure of the IFS, in comparison with the work done by their counterparts in several other countries was on the economic diplomacy front, some of them admitted. To expect some of these maharajahs now to support the export drive seems to be a tall order.

Similarly, some of the steps needed to enhance export credit, as outlined by the report, could well land on deaf ears. Take, for instance, the suggestion that a part of the Reserve Bank of India's reserves invested abroad could be used for export financing. Or another one mooting incentives for improving working capital management through favourable interest rates.

For the first suggestion - the use of part of the reserves for retiring a portion of the country's costly external debt has only been accepted in principle by the central bank. As for ensuring favourable interest rates, the RBI has already said that the days of directed slashing of rates by banks are over.

The Commerce Ministry officials had to be told recently it is passé now to tell banks where to open branches or to offer lines of credit. When told about this unpalatable fact, one senior official of the Ministry walked out from a meeting after muttering dark threats to central bankers.

Now, more policy formulations are in the pipeline — notably on Special Economic Zones. The idea is to finalise it by the end of next month, well in time to be announced perhaps along with the annual Export Import policy on April 1.

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