The Pharmaceutical Export Council of India (Pharmexcil) has urged the central government to utilise part of the US $250 billion of foreign exchange reserves of the country to tide over the crisis created by ever increasing rupee appreciation and to make the export business competitive.

In a letter addressed to the Director General of Foreign Trade (DGFT) RS Gujral, Pharmexcil chairman DB Modi asked the central government to come to the rescue of the pharmaceutical exporters in the wake of the appreciating rupee which has put the industry in a tight spot.

"You are aware that our country has got foreign exchange reserves of about US $250 billion and part of this amount is invested in the US government bonds and some other sovereign countries, whose economies are strong @LIBOR+0.25 per cent or may be less. Our submission is that out of the said reserves, Reserve Bank may give certain portion to the various banks in India with proper guidelines and this amount should be disbursed to the exporters at the concessional rate of interest LIBOR+0.25 or lower so that our competitiveness is the global market slightly goes up," the letter said.

Modi also asked the government to extend the interest subvention scheme to the pharmaceutical industry also which presently covers only 11 industries and all exporters from SME sector.

The Pharmexcil chairman also asked the government to extend the period of concessional rate of interest from the existing 180 days to 360 days. An exporter availing the post shipment credit after discounting the export bills with the bank is being charged with a penal interest of 12 per cent if the realisation does not happen within tenure of the bill subject to maximum of 180 days. Since the RBI has given extended time limit up to 360 days from realisation of exporters made by Status-Holders, the period of concessional rate of interest be extended up to 360 days for all the exporters, the letter said.

Besides asking for the exemption of service tax to all export related services with retrospective effect, the Pharmexcil also asked the government to extend the exporter-friendly schemes like Target Plus Scheme, DEPB Scheme, EOU scheme, etc.