Exporters should get ₹2500 crore for participation in global exhibitions, suggests GTRI

Under the Market Access Initiative (MAI), the government should consider allocating Rs 2,500 crore to exporters for participating in global exhibitions. MAI has not received any funds this fiscal year. Economic think tank GTRI has said this while expressing concern over the decline in export promotion funds. GTRI said that exporters have missed important opportunities to participate in global exhibitions between April and August.

Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), said, "With a meagre budget of just Rs 250 crore in previous years, the scheme was already too small for an export economy of over $440 billion. It should be relaunched with a larger budget of Rs 2,500 crore annually. The funds should be released at least a year in advance to give Indian firms a chance to secure high-visibility slots at global fairs."

He also called for relaunching the Interest Equalisation Scheme (IES), immediately implementing the Export Promotion Mission (EPM), and setting up e-commerce export hubs to boost exports amid the 50 per cent tariff imposed by the US on Indian goods.

In addition, Srivastava recommended speeding up customs clearance, making the benefits of the Remission of Duties and Taxes on Exported Products scheme predictable, and simplifying the Advance Authorisation Scheme.

"MAI, which helps exporters participate in overseas exhibitions, has not received any funds in FY25, the first such lapse in decades. As a result, exporters missed out on crucial opportunities between April and August, and even if funds are released later, prime exhibition venues booked 1-2 years ago will no longer be available," he said.

He said the suspension of the Interest Equalisation Scheme (IES) from April 2025 has left MSME exporters grappling with higher financing costs, compared to the 5-7 per cent lower interest rate they used to get under the scheme earlier. "This has eroded the competitiveness of labour-intensive sectors such as textiles, leather, handicrafts and engineering goods," he said. He said to restore cost advantages and ensure predictability, IES should be reinstated to cover all exports with an expanded annual budget of Rs 15,000 crore and a five-year commitment.

In addition, the policy to set up e-commerce export hubs announced in February 2023 has not moved forward, as there is no infrastructure or guidelines to allow shipments, GTRI said. It said making the centres operational immediately could lead to additional annual exports of US$10-15 billion in a few years. He said exporters are facing serious inefficiencies at ports on the customs front. He said independent year-round monitoring could reduce logistics costs by 5-7 per cent of the export value.

Expressing concern, Srivastava said the export promotion fund has steadily declined, weakening support for small and medium-sized exporters.

According to GTRI, the MEIS scheme had an outlay of Rs 45,000 crore, benefiting 40,000 exporters, but it was discontinued in 2020 and replaced by RoDTEP and RoSCTL with a mere Rs 20,000 crore.

"Most of the funds were shifted to the PLI scheme, which has benefited less than 100 firms and the disbursement of funds is limited. To restore balance, India should allocate more funds annually to broader export schemes, ensuring comprehensive support for MSMEs, while continuing PLI for large sectors," he suggested.

Diversifying exports to new markets will not be possible overnight, but India can buy time and space for exporters by cutting costs by 5-10 per cent through revived schemes, streamlined processes and extended funding, so that they can gradually expand beyond the US market, he said.