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Informist, Friday, Mar. 7, 2025

--Exim Bk Dy MD: Gave input, held talks with govt on US tariff threat 

--Exim Bk Dy MD: Latin American nations interested in Indian project exports 

--Exim Bk Dy MD:Currently 30-35% of Indian project exports to Africa nations 

--Exim Bk Dy MD: Hedging by importers on rise in recent mos on FX volatility 

--Exim Bk: Demand for dlr bonds dn on high Secured Overnight Financing Rate 

--Exim Bk: Demand for dlr bonds down on high FX volatility 

--Exim Bk Dy MD: Don't need to raise funds via bonds as of now

--Exim Bk Dy MD: Happy with our NIMs staying around 1.5% 

--Exim Bk: Seeing rebound in India textile exports on problems in Bangladesh

--Exim Bk Dy MD: FY24 net profit INR 25 bln; expect same for FY25 

--Exim Bk: See India merchandise exports $446.50 bln for FY25 

--Exim Bk: Expect services exports to grow faster than merchandise

MUMBAI – The Export and Import Bank of India has provided inputs and held discussions with the government regarding the potential impact of US tariff measures on Indian exports, according to Deputy Managing Director Deepali Agrawal. Speaking on the sidelines of an event organised by the bank, Agrawal highlighted the bank's proactive role in addressing external trade challenges.

"There's a lot of work being done from our side, we have given reasonable inputs to the ministry and of course the discussions are in place on how to make it more relevant because majority of India's exports are to the US and it will have a significant impact depending on what the demands are coming from the other side," Agrawals said. 

US President Donald Trump has proposed "fair and reciprocal tariffs" to address the country's trade deficit. In 2024, the US trade deficit was $45.7 billion with India. India's top export destination is the US, while India is the ninth-largest trading partner of America. Trump has referred to India as "tariff king" criticising the South Asian country's high tariffs and trade barriers on American goods. During Prime Minister Narendra Modi's recent visit to the US in February, Trump said India will not be exempted from the proposed reciprocal tariffs.

Agrawal said exporters shouldn't be too concerned because demand for their goods will remain. "When the buyers from US would start missing out this product, naturally the demand will gets created. So definitely there would be some, you know, a little bit of demand or pressure from their side as well to change the scenario," Agrawal said.  

Despite the barriers in the US, the bank has seen interest for Indian exports from Latin American countries. "We have opened an office in Sao Paolo, Brazil, because of the rising interest that we saw from there," Agrawal said. 

In response to increasing foreign exchange volatility, importers have stepped up hedging activities in recent months to mitigate currency risks, Agrawal said. Exim Bank has also observed a decline in demand for dollar-denominated bonds, primarily due to the elevated Secured Overnight Financing Rate and ongoing fluctuations in the foreign exchange market.

Meanwhile, Agrawal said, the bank remains financially stable. "We don't see the need to raise funds via bonds at this moment," Agarwal further added, adding that the bank is content with its net interest margins staying around 1.5%. The bank reported a net profit of around INR 25 billion for 2023-24 (Apr-Mar) and is expected to report the same number for the current financial year as well, she said. 

On the trade front, Agarwal also noted a rebound in India's textile exports, partly driven by challenges faced by Bangladesh. In terms of project exports, currently, 30-35% of India's project exports are directed towards African nations. 

The bank expects India's services exports to grow faster than merchandise exports going forward. The bank forecast India's merchandise exports in the current financial year ending March at $446.5 billion.  End

US$1 = INR 86.87

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Kabir Sharma and Vaishali Tyagi

Edited by Avishek Dutta

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