Finance Ministry Schedules High Level Meeting To Ensure Smooth Trade Payments

ENA Sectors 2024-01-25 14:28:57 New Delhi, Jan 25 (KNN) In response to the recent disruptions in the Red Sea region affecting trade routes, the Finance Ministry is set to convene a high-level meeting on February 5 to address challenges in trade payments. This initiative follows a directive from the Ministry of Commerce and Industry to the Department of Financial Services (DFS) to maintain credit flow to exporters amidst the Red Sea turmoil, which could impact more than 80 per cent of exports to Europe, as reported by The Indianexpress. Chaired by DFS Secretary Vivek Joshi, the meeting will bring together officials from the ministries of Finance, Commerce and Industry, External Affairs, Reserve Bank of India (RBI), and the Insurance Regulatory and Development Authority of India (IRDAI). The agenda includes discussions on payment settlement mechanisms for disrupted trade routes and pending issues related to Vostro accounts. A senior government official highlighted the coordination meeting's objective, emphasising the need for stakeholders to provide input and collaboratively find solutions for orderly trade transactions and settlements. The Reserve Bank of India and the government aim to engage with all relevant parties to facilitate the resolution of trade-related issues while ensuring compliance requirements. The disruptions in the Red Sea region have prompted concerns about the potential impact on trade, particularly with Europe. Increased security tension has led to a more than doubling of freight rates to Europe, affecting Indian shipments of low-value products such as agriculture and textiles. To mitigate the challenges faced by exporters, the government had previously directed the Export Credit Guarantee Corporation (ECGC) not to raise insurance premiums amid the rising cost of shipping to Europe. The upcoming Finance Ministry meeting signals a proactive approach to addressing trade payment challenges and ensuring the continued flow of credit to exporters during these turbulent times. (KNN Bureau) 36427 https://knnindia.co.in/news/newsdetails/sectors/finance-ministry-schedules-high-level-meeting-to-ensure-smooth-trade-payments 2024-01-25 14:28:57 knnindia.co.in Finance Ministry Schedules High Level Meeting To Ensure Smooth Trade Payments