Engineering Export Body Wants Interest Cuts
1. RBI
Maintains Policy Stability
·
The Reserve Bank of India (RBI) has kept the repo
rate unchanged at 5.25%.
·
The central bank has also retained its neutral
monetary policy stance.
·
EEPC India views the decision as a prudent step
that provides stability amid global uncertainty.
2. Demand
for Future Rate Cuts
·
EEPC India has expressed hope that the RBI will
reduce the repo rate in the future.
·
Lower interest rates would help reduce borrowing
costs for industries, particularly exporters.
3.
Engineering Exports Showing Resilience
·
India's engineering exports have continued to grow
despite multiple global challenges.
·
The sector has remained resilient amid geopolitical
tensions and disruptions arising from the West Asia crisis.
4. Rising
Costs Impacting Exporters
·
Engineering exporters have faced:
o
High freight costs.
o
Rising input costs.
o
Trade disruptions.
·
These factors have squeezed profit margins over the
past three months.
5. MSMEs
Under Greater Pressure
·
Micro, Small and Medium Enterprises (MSMEs) in the
export sector have been particularly affected by increased costs and
supply-chain disruptions.
6. Need
for Policy Support
·
EEPC India emphasized the need for both:
o
Fiscal support from the government.
o
Monetary support from the RBI.
·
Such measures are necessary to maintain global
competitiveness and sustain export growth.
7.
Positive View on Foreign Capital Measures
·
The industry body welcomed initiatives aimed at
attracting foreign investment.
·
Increased foreign capital inflows can:
o
Boost investment.
o
Facilitate access to advanced technologies.
o
Strengthen long-term industrial growth.
Key
Takeaway
EEPC India has welcomed the RBI's decision to
maintain the repo rate at 5.25% for policy stability but has urged future rate
cuts to ease borrowing costs. The engineering export sector continues to face
pressure from high freight and input costs, making fiscal and monetary support
critical for sustaining export competitiveness and growth.
Amid
evolving geopolitical conditions and persistent global uncertainty, the RBI has
preferred to keep the policy repo rate unchanged at 5.25%. It has also retained
a 'neutral' policy stance.
This
is a prudent move as it provides monetary policy stability.
EEPC
India, however, hopes that the central bank would cut the repo rate in due course
to lower borrowing costs for the industry.
The
engineering exports sector has managed to grow despite multiple challenges, especially
those stemming from the West Asia crisis. Over the past three months, the industry
has been facing high freight and input costs, thus squeezing the margins. The exporting
community, especially MSMEs, has been hit hard by the high input costs and trade
disruptions.
Given
the challenges, the sector needs both fiscal and monetary support to stay competitive
in the global market and maintain growth momentum.
Some
of the measures proposed to attract foreign capital are noteworthy, as they will
boost investment and also provide access to new technology in the medium and long
term.