Operational Guidelines For Interest Equalisation Scheme Likely Soon, Benefits To Stay MSME-Focused

(MENAFN- KNN India) New Delhi, Dec 22 (KNN) Exporters' prolonged wait for detailed operational guidelines for the new edition of the Interest Equalisation Scheme (IES) on pre- and post-shipment rupee export credit may end shortly, possibly this week, according to official sources.

However, the scope of benefits is expected to remain largely confined to the micro, small and medium enterprises (MSME) sector, with the interest subsidy rate likely capped at not more than 3 per cent.

Limited Expansion Despite Exporter Demands

Exporters have been seeking wider sectoral coverage and a higher subsidy rate, particularly amid elevated global uncertainties and the impact of US tariffs. The Finance Ministry, however, has remained cautious, citing concerns over the scheme's effectiveness in materially boosting exports, an official said, reported businessline.

“There has been a delay in notification of the guidelines for the IES and the Market Access Initiative (MAI) because of other engagements. Hopefully, this week, notifications on the detailed guidelines would be shared for both schemes and these can be implemented,” an official told businessline.

Restoration Under Export Promotion Mission

The IES, which provides eligible exporters access to credit at subsidised interest rates, was discontinued on December 31, 2024.

Following sustained representations from exporters across sectors, the scheme-along with the MAI-was included in the Rs 22,060-crore Export Promotion Mission (EPM) approved by the Cabinet earlier this month for a six-year period.

The MAI scheme, under which exporters receive government grants or subsidies for export promotion activities, is also set to be relaunched in a revised form.

Uncertainty Over Extent of Support

Despite the Cabinet approval, exporters remain uncertain about the actual level of assistance under both schemes until the detailed guidelines are issued.

Export bodies have argued that the IES is critical for competitiveness, particularly for MSMEs that face higher borrowing costs than peers in countries such as China, Thailand and Malaysia.

Exporters have sought an interest subsidy of 5 per cent for MSMEs and 3 per cent for exporters in identified labour-intensive and value-added sectors. Proposals to raise the annual subsidy cap of Rs 50 lakh per exporter are also unlikely to be accepted, sources indicated.

(KNN Bureau)

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