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`Gujarat riots have hit exports'

By Our Special Correspondent

NEW DELHI MAY 2. The Gujarat riots are among several reasons for the country's dismal export performance at the end of the last fiscal, 2001-2. Other factors for low export growth in March this year are the transport strike and bunching of several Government holidays at the end of the month.

Disclosing this here today, the Commerce Secretary, Dipak Chatterjee, said there are as yet no estimates of the impact of the event on the export front. But, he conceded, that the disturbances in the western region were definitely one of the factors affecting movement of export goods to ports. Speaking to newspersons on the sidelines of a seminar organised by the Indo-American Chamber of Commerce, he said despite the numerous constraints including depressed external environment, the export performance was quite good.

It had to be seen in the context of the fact that world wide hardly any countries witnessed positive export growth last year barring a handful, which include China, Ireland and India.

Mr. Chatterjee said the performance in March had pulled down the overall growth during the year. Usually, export data is the highest during the last month of the fiscal, but this year several factors accounted for the dip in performance including Gujarat riots, transport constraints and numerous holidays. Otherwise, he felt the country would have had a positive growth during 2001-2.

Earlier, he told the seminar that the Government was considering passing on the benefits available to public sector agencies in wheat and rice exports to private exporters. A debate was on within the Government on the issue. Currently, the Food Corporation of India (FCI) is reimbursed for handling and transport costs which is permitted under the rules of the World Trade Organisation (WTO).

This enables the FCI to export wheat lower than the actual cost of procurement and handling. Private exporters, however, cannot avail of this reimbursement as it is being provided to the FCI through budgetary provision.

He stressed that these funds cannot be described as "indirect subsidies''. Under the guidelines of the multilateral trading body, freight costs cannot be considered a subsidy.

Responding to complaints made by exporters over changes in procedures and regulations in the Exim Policy, he said the problems would be considered but clamping down on misuse of liberalised rules may not be reversed. He said the Commerce Ministry's aim in future would be to further reduce import tariffs, simplify procedures, reduce transaction costs, and create a "friendly environment'' of trust for the exporting community.

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