EEPC India raises payment issues with Russia, suggests alternative payment mechanism for Myanmar
Nov 07, 2022
New Delhi [India], November 7 : Engineering Export Promotion Council (EEPC) India Chairman Arun Kumar Garodia raised key issues of payment problems with Russia, alternative payment mechanisms for Myanmar and withdrawal of European Union GSP on Monday in a meeting with Union Minister for Commerce and Industry Piyush Goyal.
Noting the payment problems with Russia, the EEPC India Chairman flagged the issue of Sberbank charging a higher exchange rate than the market leading to rising in transaction costs. He also pointed out that UCO Bank was only dealing with customers who have accounts with them and therefore proposed to make the rules flexible.
Garodia also pointed out that there are about 12 or 13 small Russian banks which are not on the sanctioned list, and they are transferring the payments from the Russian side to the Indian exporters' Banks in USD.
He further added that public sector banks like Bank of India, Union Bank of India, etc are crediting the payments to the exporters' accounts and giving the BRC (Bank Realisation Certificate).
However, private sector banks are not doing that and banks like Axis Bank are not even handling documents or giving packing credit, the EEPC India Chairman noted.
While appreciating the steps taken by RBI for facilitating Rupee-trade with Russia, EEPC India has called for issuing proper guidelines so that private sector banks and some PSU banks like Canara Bank are made to accept Russian payments and credit to exporter's Bank Accounts and give BRC.
Considering that the Rupee-trade facility may not be extended to Myanmar as they are on the FATF list, the EEPC India requested the government to find some solutions so that India's trade with Myanmar could also be facilitated. It was mentioned that India is one of the 11 Standard GSP beneficiaries of EU GSP but the European Union (EU) announced the withdrawal of GSP benefits for India from January 1, 2023.
As the EU is a very important market for the Indian engineering industry EEPC India requested the Government to have a discussion with the EU regarding the withdrawal.
Among other key suggestions, EEPC India requested to withdraw the 15 per cent export duty on stainless steel and alloy steel items as the duty had significantly affected engineering exports. It was also recommended to include the steel sector under RoDTEP as steel is the most widely used raw material in the engineering industry.
