Government's Interest Equalisation Scheme Supports 11,000 Exporters

The government announced that approximately 11,000 exporters benefit from the interest equalisation scheme, enabling them to receive credit at concessional rates. This policy aims to reduce credit costs for Indian exporters, especially MSMEs, compared to their foreign competitors. Currently, the scheme has been merged under the Export Promotion Mission.

The government has announced that around 11,000 exporters are currently availing benefits under the interest equalisation scheme, which offers credit at concessional interest rates. This move is particularly crucial for MSME exporters, according to Minister of State for Commerce and Industry Jitin Prasada, as it helps them compete with lower cost structures of foreign businesses.

In India, the repo rate averages around 6.25 percent, though exporters often face interest rates of 8 to 12 percent or higher, influenced by risk assessments by banks. In other countries, the scenario is different, with central bank rates being considerably lower, such as 3.1 percent in China and 2 percent in Thailand. The scheme aims to bridge this gap for over 11,000 exporters, with particular focus on MSMEs.

Until June 30, the scheme applied to all MSME exports at 3 percent interest equalisation and to 410 specific product categories at 2 percent. It will continue partially until December 2024 for MSME manufacturers with a value cap, now integrated into the Export Promotion Mission with a budget of Rs 2,250 crore. Additionally, Rs 13,029 crore has been disbursed under the PLI scheme for various sectors, enhancing India's manufacturing capabilities.

(With inputs from agencies.)