FIEO Urges Government to Strengthen Export Credit and Ease Logistics Bottlenecks

Export body calls for improved credit access, lower logistics costs and policy support to help India achieve its $2 trillion export target.

The Federation of Indian Export Organisations (FIEO) has recommended that the Government strengthen export credit support, reduce logistics bottlenecks and introduce additional policy measures to support India's export growth.

The recommendations were submitted during the Board of Trade (BoT) meeting held in the national capital on July 3.

According to FIEO, India's exports have remained resilient despite increasing uncertainty in the global trading environment. However, the organisation stated that institutional support has not kept pace with the sector's evolving requirements.

FIEO noted that Priority Sector Lending (PSL) for exports has declined significantly, with export credit contracting by nearly 14 percent in the recent period. The organisation said this has created liquidity constraints, particularly for MSME exporters.

It also stated that exporters continue to face challenges including higher logistics costs, rising compliance requirements and intense global competition, making timely access to affordable working capital increasingly important.

FIEO urged the Government to work with the Reserve Bank of India (RBI) and the banking sector to restore export credit as a strategic priority and ensure adequate, timely export finance for businesses.

Among its recommendations, the organisation proposed the creation of dedicated Green Transition Funds for exporters, operationalising long-pending GST refunds for foreign tourists, and encouraging banks to adopt more facilitative approaches towards exporters.

FIEO further stated that a stronger export credit ecosystem would support India's objective of becoming a $2 trillion export economy.

Highlighting logistics-related concerns, the organisation said exporters continue to experience high ocean freight rates, shortages of containers and vessel space, and multiple non-transparent charges imposed by shipping lines and their agents. These include congestion charges, peak season documentation fees, detention charges and demurrage charges.

According to FIEO, these factors are increasing logistics costs, reducing export competitiveness and affecting timely delivery commitments, particularly for MSMEs.