EEPC India Pushes for Revival of Interest Subvention Scheme in Pre-Budget Recommendations

The Engineering Export Promotion Council (EEPC India) has urged the government to revive the interest subvention scheme for exporters. EEPC India Chairman Arun Kumar Garodia highlighted the importance of restoring the three per cent subvention rate for specific tariff lines and a 5 per cent rate for MSME exporters. Additional recommendations included tax incentives for R&D and investments in solar power.

The Engineering Export Promotion Council (EEPC India) has called on the government to restore the interest subvention scheme for exporters in its pre-budget recommendations.

EEPC India Chairman Arun Kumar Garodia stressed the necessity of the scheme, particularly in light of rising interest rates. He advocated for reintroducing the three per cent subvention rate for specific tariff lines and a five per cent rate for MSME exporters across all product categories.

The recent exclusion of merchant exporters from the Interest Equalisation Scheme (IES) has raised alarms. EEPC India noted that merchant exporters, operating on thin profit margins, are considerably impacted by credit costs. They proposed extending IES benefits to include a three per cent subvention rate for these exporters.

A government notice extended the IES for two months exclusively for MSMEs, leaving merchant and large exporters ineligible post-June 30.

EEPC India, representing nearly 9,500 member companies with over 60 per cent in the MSME sector, warned that this exclusion could severely affect businesses in competitive industries.

Other recommendations included reinstating a 150 per cent weighted deduction for R&D expenses, granting 100 per cent depreciation for MSME investments in solar power generation, and introducing a 25 per cent income tax slab for MSME manufacturing units with reinvestment conditions.

(With inputs from agencies.)