Dollar crunch in East Africa hits local export biz

Ludhiana: The scarcity of dollars in several countries, particularly in East Africa, is impacting the business operations of exporters. This shortage has led to delays in payments, causing frustration and financial strain for exporters who depend on timely transactions to maintain their business operations.Exporters have appealed to the Union government for immediate intervention to address the issue with relevant foreign governments.They said the delay in payments not only results in capital being tied up for extended periods but also disrupts the exporters’ financial planning and growth.They have also raised other issues such as shortage of containers, overcharging by logistics agents, and delays in duty drawback payments with Joint Director of Foreign Trade (Jt DGFT) Utpal Achaarya and assistant DGFT Sandeep Rajoriya.Highlighting the dire situation, Pankaj Sharma, president of the Association of Trade and Industrial Undertakings (ATIU), said, “East African countries are facing a shortage of dollars. Therefore, our payments are getting delayed, and it is hampering the growth of the industry. We want the government to speak to the department concerned and find a solution.”Sharma further highlighted the issue of delay in duty drawbacks. These duty drawbacks are crucial incentives provided by the Union government to exporters for exporting goods, meant to be released immediately upon export. However, exporters are experiencing prolonged delays due to bureaucratic hurdles and unnecessary objections, which further strain their finances.“We have to wait for weeks to get the duty drawbacks. Ideally, we are supposed to get these incentives immediately after exporting goods, but our claims are being delayed by making unnecessary objections,” Sharma said.The financial uncertainty created by these delays is not only affecting the exporters’ cash flow but also their business planning, said Pankaj Sharma. “We plan our business according to the schedule of getting payments but when any payment is stuck, it impacts our business.”Adding to these challenges is the shortage of containers and alleged overcharging by agents in Ludhiana.Sanjay Gupta, another industrialist, said the scarcity of containers is causing delays in the dispatch of materials, leading to blockage of funds. Moreover, logistics agents are reportedly overcharging for container dispatches, sometimes demanding more than double the actual price. Gupta said: “We are also facing shortage of containers in Ludhiana due to which dispatch of material is being delayed and it ultimately leads to blockage of funds. Besides, the agents involved in the logistics business are overcharging for dispatching containers. Sometimes they charge more than double the actual price.”Besides, the exporters have also demanded a freight subsidy from the Union government.