David Rasquinha, Managing Director, Export and Import Bank of India, paints a positive picture on exports as he feels the worst is behind globally. The government-run bank is gearing up for the emerging growth curve. He recently spoke to BusinessLine on the export scenario and growth prospects.

How was the year 2016-17 for Exim Bank?

It was a pretty good year amid inverse effects (bulk of our assets in Dollars) of rupee appreciation. We have seen growth both on the funded and non-funded portfolios. In funded portfolios, we made our first disbursement in Bangladesh. Also, stronger disbursements were there in Africa under various buyer credit programmes and overseas investment finance also improved. On the non-funded side, it was primarily performance guarantees and advance payments guarantees. As of March 31, 2017, the bank had sanctioned $2.84 billion for 22 projects valued at $3.07 billion.

How is the export scenario now and what do the latest developments tell us?

I think the worst is over for exports. Frankly, if you look at the trend, it never came down. What happened was the rupee-dollar equation that showed a lower export value. But just for the depreciation, exports remained quite strong. It is only that translation that had the effect. Additionally, for Indian exports, there was a price effect ruling.

In the last four months of this year, we have started seeing an upturn.

Monthly figures indicate that growth (year-on-year) is there. This is really a reflection of not only improving competitiveness of Indian exports, but also the demand revival in buyer markets.

IMF has projected total world growth at about 3.5 per cent. There will be more demand for textiles, gems and jewellery, automobiles, light engineering and chemicals.

Worst seems to be over in Europe too. Greece is a different matter. But at least the other economies seem to have bottomed out. Growth is kicking in though high percentage levels will take time.

Overall, I think we can look ahead at a scene of increasing global demand, which will drive Indian exports – both goods and services. So, we are quite optimistic going forward.

How do you see opportunities for Indian companies in Latin America?

Latin America is about 20 different countries, Brazil faced a setback, but we see it as a short-term pain. I would expect Brazil to be back on growth track in a year or so.

Venezuela is facing problems. Columbia is doing well. Argentina is coming back to the global economy. Paraguay and Uruguay are very small economies.

So, it’s a mixed picture there. But, definitely opportunities are there. For example, we have financed wind projects in Brazil, which is a challenging market because of the preference given to local steel.

Yet, we were able to finance and it seems to be working. Also, we have financed pharma companies that have set up joint ventures in that region.

Indian companies have to work hard – because of different languages and culture and challenges in freight. After all, most of those countries were dependent on Spain and Portugal because of the historical linkages. Due to slowdown in Europe, both the countries had certain limitations in expanding the business and that leaves a vacuum for Indian companies to move in.

But, they should be willing to be there for long term. It needs at least 2-3 years of ground work for the business to flow.

Which are the sectors you are bullish on for export growth?

I would say pharmaceutical is an area we are very bullish on. There are challenges of course. Number of USFDA inspections has risen. The Form 483 reports are rising.

But I think it is an opportunity for Indian exporters. After all, FDA inspections are not getting tough only with India, it is getting tight on all suppliers.

It is an opportunity to improve our processes. They are not saying the product is bad or inefficient; they want the processes to be tightened.

Data integrity and records are very important. Improvements will benefit India too. Along with pharma, light engineering and auto components will also have brighter scope.

Renewable sector has huge potential, particularly, the wind energy equipment. However, projects will be the biggest opportunity.

What will be Exim Bank’s key focus areas this fiscal?

Of course, the first focus is to convert $5 billion line of credit to Bangladesh for implementing projects.

Also, we are also looking at building our links in Africa. For the first time, India will be hosting the annual meeting of the African Development Bank (AfDB) in Ahmedabad .

We will be partnering with them to host seminars on financing exports to Africa, and projects there.

We are also trying to improve our funding access. We intend to raise $1.5-2 billion over phases during this fiscal.

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