India’s exporters lobby Federation of Indian Export Organisations (FIEO) recently wrote to the Reserve Bank of India (RBI) and the finance ministry urging them to lift the blanket ban on letters of undertaking (LoUs), saying it will further hurt exports by making them more uncompetitive. FIEO is promoted by the ministry of commerce and industry.
According to FIEO director general Ajay Sahay, the organisation has underplayed the impact of the mid-March RBI decision as it was under the impression that only the gems and jewellery businesses used the instrument, but it has later discovered that others, including the textile and leather industry, are also using LoUs.India's exporters lobby Federation of Indian Export Organisations (FIEO) recently wrote to the Reserve Bank of India (RBI) and the finance ministry urging them to lift the blanket ban on letters of undertaking (LoUs), saying it will further hurt exports by making them more uncompetitive. FIEO is promoted by the ministry of commerce and industry.#
He was assertive about the decision affecting exports, according to a report in a top Indian English-language daily. The alternatives for LoUs like bank guarantees increase cost by 1-3 per cent, thereby making exports uncompetitive, he added. (DS)
ALCHEMPro News Desk – India
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