Commerce Minister Nirmala Sitharaman on Thursday said
the traditional export markets of US, Britain and European Union have become
saturated and the trade in merchandise goods need a lot of handholding.

“With the traditional markets saturating, trade in
merchandise goods needs lot of helping because demand is falling,”
Sitharaman said at the Economic Editors’ Conference here.

“For want of more demand, we are looking for newer
markets. Exporters have reached Latin America, South Africa. We have had
success with tying up with countries like Chile, Peru,” she added.

The Minister said that the government is trying to encourage
exports and give it a boost sectorally by addressing their concerns. 

It is the services sector that is still keeping pace, she
added.

The government is in discussions for free-trade agreements
with Canada and Australia, the Minister said.

Engineering goods, chemicals, drugs and pharmaceuticals,
textiles, garments, gem, jewellery, diamonds, leather products, carpets, sea
food and electronic goods account for a substantial share of India’s exports.

Sitharaman had earlier said that to boost export, the ECGC,
the government company which ensures sustained flow of exports, will have to support
the exporters.

“We have to look for newer markets which may be in
Africa or in Latin America and it is for ECGC to stand by the exporters to
assure them that they are not going to face any risk,” Sitharaman had
said.

“ECGC’s (formerly known as Export Credit Guarantee
Corporation of India) role is very vital in handholding exporters in these
trying times because exports have seen a continuous decline over several
months,” she had added.

Small and Medium Enterprises (SMEs) contribute a major chunk
of exporters who receive the support from ECGC.

Around 90 per cent of world merchandise trade and services
involve credit, guarantee or insurance. More than 90 per cent of India’s
merchandise exports are made on short term credit i.e. less than 360 days.

Estimates by ADB (Asian Development Bank) Institute indicate
that exports from India suffered due to unmet trade finance needs to the order of
$300 billion approximately.

IMF estimates suggest that globally bank intermediated trade
finance support around 40 per cent of merchandise trade.