India Exim Bank pitches for new export markets to empower Indian businesses

Export-Import Bank of India (India Exim Bank) is committed to empowering Indian businesses by expanding exports to new markets, and it aims to collaborate with existing ones to foster growth amid economic slowdown and geopolitical challenges, a senior official said on Sunday.

The external trade-focused bank does not see any concern so far for its exposure in Canada, and the situation has the attention of the government, the official said.

"With the economic slowdown in the key markets, the bank is focusing on trade facilitation measures to boost exports in new markets and help existing markets grow," India Exim Bank Deputy Managing Director Tarun Sharma told PTI in an interview.

"We feel the issue has adequate attention from the government, and perhaps there will be no long-term ramifications. We have not heard anything untoward from any of the companies that we have supported, who are dealing with Canada in terms of trade or investment," he said when asked about the ongoing India-Canada diplomatic row.

Asked about its strategy, Sharma explained that among its measures to boost exports, the bank is focusing on new emerging markets like African, Latin American and South

Asian markets for incremental exports. In addition, GIFT City's new subsidiary will also play a vital role in factoring overseas transactions.

The India Exim Bank had forecast a 4.8 per cent decline in India's total merchandise exports in Q2 (July-September) of FY24, shadowed by continued slowdown in select major trade partners, including advanced economies.

Under the Trade Assistance Programme (TAP), India Exim Bank provides support through credit enhancement to trade instrument(s), thereby enhancing the capacity of commercial banks/financial institutions in India to support cross-border trade transactions, involving markets where trade lines are constrained or where the potential has not been harnessed.

"We have supported incremental exports by supporting over 275 transactions in 30 countries through 45 banks in emerging markets. And we have covered over three-quarters of a billion dollars of transactions supporting about 95 Indian companies across diverse sectors, including agro products, automotive, textiles, machinery, engineering goods." Sharma said.

Sharma informed that its newly established subsidiary Exim Finserve at the international financial services centre in GIFT City, Gujarat, will have a long-term impact supporting the growth of exports from India.

"This month, we are doing our first set of transactions, exports happening to the United States, and we are again very confident that both the trade assistance program and factoring will cover the entire gamut of pre-finance services in India, both on documentary credit basis and open terms," Sharma said.

With Exim Finserve, exporters can obtain receivables financing, protection against non-payment risk, and receivables management services. As a result, exporters will have improved cash flow and reduced payment risk, allowing them to explore new markets.

Amid the headwinds, Sharma remains optimistic about a 12-15 per cent growth in loan book and expects a revival in the third and fourth quarters of the current fiscal. Net Loan Portfolio in 2022-23 was Rs 1,34,523 crore.

Sharma said 80 per cent of its exposure is in foreign currency and the rest in the Indian currency.

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