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| EXPORT-IMPORT BANK OF INDIA | |||||||
| Enhancing
India’s International Trade |
By TC Venkat Subramanian, CMD, Export-Import Bank of India | ||||||
|
International trade has become a crucial component in any nation’s economic growth. Globalisation has opened up new opportunities for economic progress in developing countries through greater integration into the world economy. Increased trade has generated gains in productivity and efficiency while overcoming the limitations of resource endowments across nations. The challenge in today’s world therefore is how to manage globalisation by designing an institutional mechanism, which ensures that a country can seize new opportunities created by globalisation. It is this objective that is subserved by Export-Import Bank of India (Exim Bank), which was established as a statutory apex financial institution in 1982 under an Act of the Indian Parliament to finance, facilitate and promote India’s international trade. It is the principal financial institution in the country for coordinating the working of institutions engaged in financing exports and imports. Exim Bank Exim Bank’s vision has evolved from
financing, facilitating and promoting trade and investment, to a
conscious, systematic effort at creating export capabilities by
arranging competitive finance. Today, Exim Bank seeks to develop
commercially viable business relationships with externally oriented
companies by offering them a comprehensive range of lending and service
programmes.
With strong business fundamentals, the
Bank proactively seeks to enhance the competitive edge of Indian
companies in their internationalisation efforts through a range of
financing programmes and advisory and support services at all stages of
the business cycle, viz. Import of Technology, Export Product
Development, Export Production, Export Marketing, Pre-shipment,
Post-shipment and Investment Abroad. Exim Bank also capacitates two-way
technology transfer by financing import of technology into India and
investment abroad by Indian companies for setting up joint
ventures/subsidiaries.
Over the years, the Bank has developed a
wide range of financing products and services for promoting India’s
international trade. Financing of research and development activities
of exporting companies, equity participation in Indian ventures
overseas, finance for software product development, and short-term
finance for meeting working capital and other requirements of
corporates are Bank’s initiatives in this direction.
Project Exports Exim Bank has been the prime mover in
encouraging project exports from India in a focused manner by providing
advance information and advisory services for preparing competitive
bids. The Bank provides a range of funded and non-funded facilities, by
way of guarantees, to support such project exports. Post-shipment
deferred credit by way of supplier’s credit/buyer’s credit is also
provided on competitive terms. Financing is provided both in foreign
currency and Indian rupees. Currently, 188 project export contracts
valued at approximately US $ 5.5 billion are under execution in 43
countries across Asia, Africa and Europe by 42 Indian companies with
Exim Bank’s support.
Lines of Credit Exim Bank extends Lines of Credit (LOCs)
to overseas financial institutions, foreign governments and their
agencies, enabling them to onlend term loans to finance imports of
eligible goods from India. The Bank now has in place 57 LOCs covering
more than 70 countries with credit commitments aggregating US $ 1.3
billion available for utilisation. With a number of LOCs at various
stages of negotiation, Exim Bank is well positioned to catalyse and
contribute to sustained performance of India’s exports.
Finance for Indian Ventures Overseas The Bank, in order to help Indian
companies in their internationalisation efforts, provides term loans to
them, both for equity investment in their ventures overseas as well as
for onlending purposes. Exim Bank has supported more than 100 Indian
companies, largely SMEs, for equity investments in 127 ventures in 44
countries of Rs. 20.8 billion in a wide range of sectors including
chemicals, packaging, software, jute and pharmaceuticals, among others.
Besides, Exim Bank also undertake direct equity stake in Indian
ventures abroad, to enable Indian companies to supplement their equity
with Exim Bank’s contribution.
New Business Initiatives Bank has made forays into financing of
entertainment industry and the healthcare service sector, both of which
offer huge export potential. Formation of the specialised Agri Business
Group with committed corporate resources has underscored the increasing
thrust of the Bank on agricultural exports. This has been further
augmented by a conscious effort to create an enabling environment
through synergies derived from a variety of institutional linkages,
publishing a bimonthly newsletter, ‘Agri Export Advantage’ and setting
up an in-house agro-portal (www.eximbankagro.com). Exim Bank has also
taken a lead in promoting exports for rural grassroot enterprises. The
Bank has signed Memoranda of Cooperation with leading NGOs and
self-help groups for promoting products of village industries.
The Bank’s initiative in launching
Export Marketing Service enables Indian companies to widen their export
basket in terms of new buyers in larger number of countries. The Bank’s
services have been sought by a number of Indian companies representing
varied sectors. Exim Bank’s network of overseas offices play an active
role and the services are offered on a success fee basis.
Institutional Linkages Exim Bank has consciously sought to
develop useful relationships with multilateral agencies, other export
credit agencies, trade and investment promotion bodies, Indian Missions
abroad, commercial banks and financial institutions to help create an
enabling environment to support two-way transfer of technology, trade
and investment. Exim Bank, in order to enhance cooperation and forge a
stronger link among the Asian Exim Banks, initiated the Asian Exim
Banks Forum in 1996. While the first two meetings were held in
Bangalore and Mumbai, the 11th Annual Meeting was recently hosted by
the Bank in October in Goa.
Information & Advisory Services Exim Bank supplements the globalisation
efforts of Indian companies through advisory services that enable
exporters to evaluate international risks, export opportunities and
enhance competitiveness. Such services include search for overseas
partners, identification of technology suppliers, negotiating an
alliance and consummating a joint venture. Exim Bank shares
institutional building capabilities worldwide in terms of providing
consultancy. The Bank has provided consultancy services in setting up
an Exim Bank in Malaysia and an Export Credit Guarantee Company in
Zimbabwe, among others. The Bank disseminates information on export
opportunities and highlights developments that have a bearing on Indian
exports through its quarterly newsletter titled ‘Eximius: Export
Advantage’.
Planning & Research Exim Bank publishes several Occasional
Papers and Working Papers every year dealing with industry sectors,
overseas markets, and macroeconomic issues of relevance to
international trade. The results of these research studies are of
interest to exporters, policy makers, industrialists and export
promotion agencies.
Promotional Programmes Consultancy Support Programme
The Bank has arrangements for sponsoring
and part-financing Indian consultants for providing consultancy
services to private sector small and medium enterprises in developing
countries under Technical Assistance Programme of International Finance
Corporation (IFC), Washington D. C. and other international agencies.
Skill Upgradation for Exports The Bank has in place ‘Eximius Learning
Centres’ at Bangalore and Ahmedabad for imparting specialised knowledge
and training to exporting companies, particularly SMEs on various
international trade related topics.
To sum, Exim Bank today functions as a
strong, multi-product, diversified organisation constantly striving to
reach out to Indian companies, as a facilitator, promoter and partner
in their quest for excellence, growth and globalisation.
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| RNI No.
WBENG/2008/27737 |
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