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Exim Bank study suggests steps to boost Indian financial exports

Anurag Joshi in Bombay

Export of financial services continues to remain a low-thrust area in India.

In developed countries, financial institutions and firms actively bid for and bag export projects. This has enabled them to capture a major chunk of the financial exports market.

According to an Export-Import Bank of India study, the basic factors hampering financial exports from India are lack of proper budgeting and revenue targeting for such projects, failure of Indian institutions to establish consulting arms and lack of resources to invest in export marketing.

To make their presence felt, the study recommends that Indian financial firms enter into strategic alliances with leading consulting firms in the developed countries and jointly bid for projects abroad.

The marketing strengths of the global firms coupled with the practical experience of Indian companies would allow the country to increase its share in world exports of financial services.

Achieving any breakthrough seems an uphill task. India's earnings from financial exports pale into insignificance when compared to the $ 3.6 billion provided in 1997 by multilateral agencies for developing the financial sector in world economies and building infrastructure for this industry.

The Exim Bank study observes that even after factoring in half of this amount ($ 1.8 billion), which is disbursed towards consulting fees for financial services projects, a huge potential remains to be tapped by Indian firms and institutions.

''Indian firms lack a conscious effort to boost financial exports. As a result, India's share in world exports of such exports is negligible'', said Kuntal Sur from Exim Bank's planning and research group.

Exim Bank recommends that Indian financial firms take an active interest in marketing their ideas and concepts to potential overseas companies. This entails more visits to multilateral agencies and regular meetings with clients.

This strategy has worked for many European and American companies that have an edge over their Indian counterparts on account of relevant experience in the field. These firms and institutions have been able to bag key projects and even some micro-credit schemes targeted towards small enterprises.

Currently, export of financial services is mainly undertaken with the limited objective of providing some managers an opportunity to do a stint abroad and enable them to generate some savings. Most of these companies are able to spare three or four people for three months at a time for such projects.

Many of the larger projects require 20 professionals over a six-month to one-year time-frame, the study opines.

At the administrative level, the study suggested that the commerce ministry treat financial exports as a thrust area. It also said the Indian embassies abroad should actively assist in identifying projects in their countries and support Indian corporate bids for such projects.

UNI

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