Revamped eBRC system in soft launch phase; 2.5 lakhs self-generated BRC recorded: Shri Tirumala Venkatesh K Joint DGFT, GoI
New Delhi: The DGFT’s foreign trade policy 2023 puts emphasis on paperless transaction and a separate chapter has been dedicated to e-commerce exports. A revamped eBRC system is in the soft launch phase, we already have over 2.5 lakhs self-generated BRC’s which has enhanced the ease of doing business. A framework to capture flow data for export credit needs to be created to provide policy makers with adequate data. Interest equalisation scheme has ensured that MSMEs have access to credit at affordable rates” said Shri Tirumala Venkatesh K Joint DGFT, Ministry of Commerce and industry, GoI at an ASSOCHAM event.
“Trade finance system like the Hundi System existed in the Indian history which has been perfected over the centuries. The formalisation of trade started when enforceable contracts through rule of law started prevailing. The codification of letter of credit led to a revolution in international payments. Financial globalisation picked up in the 1980’s and now we are in the cusp of a second revolution led by digitization. India’s movement towards paperless trade is quite noteworthy. India achieved an impressive score of 93.5% in the 2023 UN ESCAP global survey, on digital and sustainable trade facilitation. We scored 100% in four key areas, transparency, formalities, institutional arrangement & cooperation and paperless trade” said Mr Venkatesh at ASSOCHAM’s 5th National Summit on Trade Finance for Inclusive Growth at New Delhi.
Shri Sanjeet Singh Senior Adviser, NITI Aayog said, “Banks have been proactively going out on a limb to support trade. Niti Aayog is working towards the vision of India in 2047 and beyond. A report on export preparedness index in 2022 shows that the top 10 states account for 85% of our exports and the top 10 commodity groups out of India accounts for 80% of our exports. The top 100 districts out of 680 exporting districts contribute 87% and 66% of the top districts are in 7 states. This highlights the regional concentration and concentration in what we export. Of the 6.5 crore MSMEs in the country, currently only 1% of them exports. This is a small fraction of our potential exporting base. The mandate for development is not only about rapid development it is about inclusive development, and we are reaching out to every corner of the country.”
Delivering the keynote address at the summit, Shri Rajnish Kumar Former Chairman, State Bank of India (SBI) said, “India’s international trade in 1991 was about 60 billion inclusive of services and merchandising, today we are at more than 1.5 trillion. This is a remarkable progress and the gap with China is narrowing and in the next 15-20 years we are confident that we would close this gap and find our place in international trade. India historically has always been a power in international trade. Inclusive growth can only come about when we have a flourishing MSME sector. The question always has and always been around availability of credit to MSMEs at an affordable cost.”
Sharing his perspectives, Shri Devendra Sharma Interim CEO & Head- Corporate Banking, Mashreq India said, “Trade is the basic building block around which entire system of economic systems revolves. Credit is about delivering strength and muscle today in anticipation of future growth. We are at the beginning of decades of double digit growth as we look at $2 trillion in annual exports from about $800 billion. We have to democratise the availability of trade finance and the distributed impact of income from growth should be a key driver of all our initiatives. Today, about 45% of India’s exports come from MSMEs while less than 20% of them have access to institutional trade credit. There is a need for a quantum shift in trade insurance backed export credits are being looked at.”
Dr. Charan Singh Advisor, ASSOCHAM National Council for Banking & Non-Executive Chairman, Punjab & Sind Bank said, “Trade finance process will become digitally driven in the days to come to streamline documentation, reduce fraud and enhance efficiency. Global trade finance market is expected to reach $90 billion in the next five years from the estimated $50 billion currently. In India, the market is still in its nascent stage at about $3 billion. The rupee is fast gaining prominence in balance sheets of various countries and UPI is at the forefront.”
Addressing the summit Shri Madhav Nair Co-Chairman, ASSOCHAM National Council for Banking and CEO & Country Head- India, Bank of Bahrain & Kuwait, said “Covid disruptions gave rise to the China+1 strategy and many companies have already invested in India. Schemes like PLI and Make in India have fuelled remarkable growth particularly in electronics. India pursuance of FTAs signifies our commitment to trade liberalisation and economic integration. A concerted effort from policy makers, financial institutions and industry stakeholders will unlock the full potential of trade finance and support India’s journey towards becoming a global economic power house.”