MUMBAI: The Engineering Export Promotion Council has sought setting up of a technology upgrade fund scheme (TUFS) to the tune of Rs 3,500 to boost exports from the sector.
"Engineering exports, which contribute the second largest share to the overall export basket, need to be revived. We have suggested to the Government to extend the TUF scheme, which is applicable to thetextile industry, to the engineering sector as well," Engineering Export Promotion Council (EEPC) Chairman Aman Chadha told reporters here.
"Unlike Rs 1,800-crore TUF earmarked for the textile sector, the engineering sector needs at least Rs 3,500 crore for the next two-three years under such a scheme," he said.
The sector needs technology boost to sustain growth, especially when the import of raw material has gone up significantly, Chadha said.
"In spite of massive growth in the past few decades, the domestic engineering sector suffers from severe technological obsolescence and lack of economies of scale. It has also not been able to take advantage of falling rupee due to high import content.
"Therefore, there is an urgent need for taking steps to improve quality of our products through injection of technology in the sector," he said, adding, "we need to improve our basket of exports."
Exports dropped 5.7 per cent in April-July to USD 18.03 billion over the year-ago period, he said, adding, "however, some positive reversal has been noticed in August, which needs to be sustained with rigorous efforts. We expect exports to touch USD 60 billion this fiscal against USD 58 billion in FY13."