Ludhiana: President of the Federation of Indian Export Organisations, SC Ralhan, said that even though announcement of a ceasefire and reopening of the Strait of Hormuz have brought immediate relief to exporters by easing shipping disruptions which may help normalize logistics in the short term, exporters will remain cautious given the temporary nature of the truce. Sustained stability, he said, is essential for restoring confidence and ensuring smooth trade flows, he staidHe advised exporters to adopt a wait-and-watch approach amid reports of ceasefire violations following the announcement. Resuming exports through the Strait of Hormuz should only be done once conditions are assured, he cautioned, noting that exporters have already been in a lurch since the conflict began, with their consignments getting stranded. Ralhan said exporters to West Asia should avoid sending shipments for now due to a trust deficit arising from the volatile situation and the possibility of cargo getting stuck again. “Exporters should not take a chance until a complete assurance is there,” he said.Speaking about the impact the conflict already has on Indian exports, he added that the West Asia crisis could lead to a dip of about 7–8 per cent in exports for March alone, while annual goods exports may be hit by 2–3 per cent. However, combined goods and services exports are still expected to grow by about 5–6 per cent, he added. Speaking about improving export sector competitiveness, Ralhan said interest rates on loans for exporters are high, particularly for the manufacturing sector. To support exporters, he suggested that lending rates for export-oriented businesses should not exceed 2 per cent at the government-level. He noted that several competing economies offer significantly cheaper credit, citing Japan as an example where exporters can access near-zero interest financing, which enhances their competitiveness in global markets.He also stressed the need for greater government support for modernization of equipment through more viable technology upgradation schemes. With global demand shifting toward high-precision and advanced products, he said exporters must invest in modern machinery, while the government should facilitate this transition through policy support and incentives. He added that business owners should also proactively invest in upgrading factories to remain competitive.Ralhan further called for ending the inverted duty structure, saying it encourages tax evasion and creates complexity in the tax evasion system. Though GST has simplified the taxation system much over VAT, but a one-slab uniform GST, may be at the rate of 12 per cent is a must, arguing that such a structure would improve clarity, encourage more businesses to come under the GST ambit and ultimately benefit government revenues.
