Boosting Exports: Fiscal Support in Focus at Pre-Budget Meeting

Exporters are set to request fiscal support measures from Finance Minister Nirmala Sitharaman to hit a USD 2 trillion export target by 2030. They will likely ask for incentives for R&D, extension of the Interest Equalisation Scheme, and marketing support. The scheme, ending June 30, helps MSMEs with competitive export credit rates.

In a strategic move to boost India's exports to USD 2 trillion by 2030, exporters are planning to seek robust fiscal support measures during their pre-budget meeting with Finance Minister Nirmala Sitharaman. The industry has witnessed a significant surge in exports, climbing from USD 478 billion in 2017-18 to USD 778 billion in 2023-24.

The export community's ambitious target necessitates additional efforts and government-backed incentives. Expected demands include fiscal incentives for research and development, an extension of the Interest Equalisation Scheme, and enhanced marketing support through the Market Access Initiative (MAI). Notably, the Interest Equalisation Scheme is due to conclude on June 30 this year, having started on April 1, 2015.

Recently, the Union Cabinet allocated an additional Rs 2,500 crore to continue the scheme until its mid-year end date. This support is critical as it grants MSME exporters and identified sectors, such as handicrafts and readymade garments, access to rupee export credit at competitive rates amid global economic challenges. The scheme currently offers a 2-3% interest equalisation benefit on pre and post-shipment export credits.

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