(MENAFN- KNN India)
New Delhi, Jan 15 (KNN) The Commerce Ministry is expected to propose a five-year extension of the Interest Equalisation Scheme for pre- and post-shipment rupee export credit in the upcoming Union Budget.
This move aims to bolster India's export sector amidst ongoing global economic challenges, according to an official source.
The scheme, which ended on December 31, 2024, provides exporters, particularly from identified sectors and MSME manufacturers, with subsidised interest rates on export credit. By reducing borrowing costs, it enhances their competitiveness in international markets.
Initially launched on April 1, 2015, for a five-year term, the scheme has undergone multiple extensions, including an additional year during the COVID-19 pandemic.
In its current form, the scheme offers a 2 per cent interest subsidy to exporters across 410 product categories and a higher 3 per cent benefit to all MSME manufacturers.
Key sectors benefiting include handicrafts, leather goods, textiles, carpets, and garments. Individual benefits are capped at Rs 50 lakh crore annually per Import Export Code (IEC).
Recent data underscores the scheme's impact. Between April 2023 and November 2024, Rs 2,641.28 crore was disbursed out of an allocated Rs 2,932 crore, complementing earlier allocations of Rs 3,118 crore in 2022-23 and Rs 3,488 crore in 2021-22.
The initiative is jointly managed by the Directorate General of Foreign Trade (DGFT) and the Reserve Bank of India (RBI) through banks, ensuring effective monitoring and implementation.
Exporters, including the Federation of Indian Export Organisations (FIEO), are strongly advocating for the scheme's continuation.
FIEO President Ashwani Kumar highlighted its role in enhancing India's global trade position, especially in the face of stiff competition from nations like China, where interest rates are as low as 2-3 per cent.
Finance Minister Nirmala Sitharaman's Union Budget announcement on February 1 is keenly awaited, with the export sector pinning hopes on this pivotal support measure to navigate current economic turbulence and drive future growth.
(KNN Bureau)
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