Why do you think Indian exports have declined in the last two years? Is the same situation still continuing?

India opened the floodgates of imports in the last few years. The result is that cheaper foreign goods flooded India while domestic producers are finding the going tough. The goods produced by Indian companies are not competitive when compared to many of thecountries. While India allowed free entry into many areas, still there is no exit policy. Indian exports have suffered due to heavy imports from China, South-east Asia and Europe consequent to currency devaluation. Besides, the domestic industry could not take off (as is evident from the fall in industrial growth rate) and the Indian market has remained sluggish. The government needs to come out with more exporter-friendly measures to boost the revenue inflow. This will also take care of the external debt and provide a stimulus to domestic industry and create more employment.

The new Exim policy will be announced this week. What do you expect from the new policy?

Exports should be given `national priority'. The government should reimburse sales tax and octroi duty critical cost components like Modvat on actual basis provided the raw material and packing material is used for export production. The outgo of revenue for the government will be much less as compared to the present Duty EntitlementPassbook Scheme (DEPB), drawback and advance licences. Currently there is a revenue leakage in various government schemes. DEPB in its present form should be discontinued. If the state governments do not agree to reimburse sales tax and octroi, the Union government should issue `parallel currency notes' in the denomination of Rs 1,000, Rs 10,000, Rs 1 lakh etc in lieu of DEPB. These currency notes should be valid for payment of customs duty and later other levies like income tax.

Moreover, the government should treat `deemed exports' on a par with physical exports. This means supply of goods to a holder of advance licence should be treated as imports while the buyer's move should be treated as deemed exports as he will pay from his Export Earning Foreign Currency (EEFC) account. This will also save the domestic industry and counter the onslaught of foreign products.

How do you view the cost of financing exports in India? The cost is much lower in other countries...

To make our exportscompetitive, interest rates on export finance should be slashed from 9 per cent to 7 per cent. The Reserve Bank of India should consider this in its credit policy (expected in first week of April) as our counterparts abroad are getting cheap finance.

Do you think the Indian rupee is ruling at the correct level against the dollar?

The current level of the rupee (42.40 against the dollar) is not in favour of exporters. The rupee should be 45 against the dollar to make exports competitive. You may note that the currencies of our competing countries had fallen by 45-70 per cent. Now world crude oil prices have started going up.

This may create problems for the rupee later... imports will become expensive.

How do you view the latest Union budget presented by Yashwant Sinha?

He should have removed the 4 per cent special additional duty (SAD) which was imposed for protection of domestic industry from octroi and sales tax. He accepted our suggestion for 100 pr cent Modvat on raw materialspurchased against OGL or advance licence for export production and permission for manufacturer-importers to open parallel trading company to avoid 4 per cent SAD.

I feel anyone who brings in foreign exchange through official banking channel should be encouraged. Besides, 1 per cent of the revenue generated in every port or excise office must be spent on modernisation. Export houses (where it is star or super star) should be encouraged to set up warehousing facility in bonded warehouse ports like Rotterdam, Hamburg, Antwerp, Singapore and Hong Kong so that they can offer ready stocks in the global market without any delay in transit.

Given that export growth was mostly negative last year, is it possible to achieve 20 per cent growth in the near future?

In spite of all hurdles like devaluation, high cost of finance, entry of cheap foreign goods and sluggish domestic industry, the export community can still face challenges and give an annual growth of 20 per cent in dollar terms provided thegovernment comes out with favourable policies.