No Immediate Hit Seen On India From Global Trade Wars, Says Exim Bank's Deepali Agrawal

Export targets for the ongoing fiscal are unlikely to take a hit despite the ongoing tariff wars, according to Deepali Agrawal, deputy managing director at Exim bank.

While there will be an impact on India's economy, it is too early to gauge the hit, Agrawal said, with no signs of asset quality deterioration in credit lines extended by the bank.

The bank offers trade assistance programmes for riskier geographies to diversify exports, she said, adding this was expected to help lower impact.

India's exports remain concentrated with a small number of countries making up for a bulk of the merchandise exports. Going ahead, demand will come from developing economies where the risk perception is higher, officials at Exim Bank explained. The bank has worked in these geographies and has links with the banks there, they added.

These trade finance gaps have widened significantly post the pandemic and present an opportunity, officials said.

Beyond the United States, there is already robust export demand from the Middle East, several African countries and Latin America, Agrawal said.

The bank is also working on export factoring — allowing businesses to sell their invoices to a third party in exchange for cash. 

Another focus area of the bank is MSMEs, Agrawal said. The bank is reaching out to MSMEs, and is looking for exporters with differentiated product offerings, she said.

Exporters are also set to gain from the recent depreciation in the rupee and some of the FTAs that the government is likely to sign, Agrawal said.

While exports of pharmaceuticals, readymade garments and textiles remain focus areas going ahead, electronics and toys are among the recent success stories seen by the export industry, she added.