EEPC India Urges Govt To Reinstate IES, Support Engineering Exports Amid US Tariffs

2025-09-13 02:11:10

(MENAFN- KNN India) New Delhi, Sep 13 (KNN) The Engineering Export Promotion Council (EEPC), India, has urged the government to reinstate the Interest Equalisation Scheme (IES), ensure affordable export financing, and provide support to offset the impact of punitive US tariffs on Indian engineering exports.

In a meeting with Reserve Bank of India (RBI) Governor Sanjay Malhotra, EEPC India Chairman Pankaj Chadha highlighted the sector's vulnerability, noting that India's engineering exports to the US average around USD 20 billion, accounting for roughly 45 percent of total exports exposed to US tariffs.

He emphasised the need for urgent government intervention to help exporters absorb the financial impact.

Chadha specifically urged the reinstatement of IES, particularly for Micro, Small and Medium Enterprises (MSMEs) and SME manufacturing units, and flagged the challenges these exporters face in accessing collateral-free loans.

"MSMEs continue to face difficulties when seeking finance from banks and financial institutions, where high collateral requirements persist. Additionally, the credit rating system used by banks to determine collateral and interest rates disproportionately affects MSMEs. As a result, MSMEs end up paying higher interest rates besides providing substantial collateral," he said.

He also suggested that credit rating agencies should exclude US exposure when evaluating MSME exporters' ratings for this year.

Additionally, EEPC India proposed that while the industry could absorb 15 percent of the tariff, the government provides support for the remaining 15 percent-either through export scrips or exchange conversion at the Real Effective Exchange Rate (REER).

EEPC India further highlighted that the average duty difference between India and competing nations is around 30 percent, underscoring the need for targeted policy measures to maintain global competitiveness.

(KNN Bureau)

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