Govt Extends Interest Equalisation Scheme For MSME Exporters Until September 30

New Delhi, Sep 5 (KNN) The Indian government has announced a one-month extension of the Interest Equalisation Scheme on pre- and post-shipment rupee export credit, prolonging the initiative until September 30, 2024.

This decision aims to bolster the nation's export sector amidst global economic headwinds.

The scheme, which provides interest benefits to exporters, was previously set to conclude on August 31 after a two-month extension in June.

The Directorate General of Foreign Trade (DGFT) confirmed the extension in a recent trade notice, specifying that it now applies exclusively to MSME manufacturing exporters.

This extension follows a significant financial commitment made by the Union Cabinet on December 8, 2023, when an additional allocation of Rs 2,500 crore was approved to sustain the scheme through June 30, 2024.

This supplementary funding, augmenting the existing Rs 9,538 crore outlay, was intended to bridge the financial gap and ensure the program's continuity.

Initiated on April 1, 2015, the Interest Equalisation Scheme has undergone several extensions, including a one-year prolongation during the COVID-19 pandemic.

It serves as a crucial support mechanism for exporters from designated sectors and all MSME manufacturer exporters, enabling them to access rupee export credit at competitive rates.

The scheme operates within defined parameters, with benefits to individual exporters capped at Rs 10 crore per annum per Import Export Code (IEC). Its fund-limited nature underscores the government's targeted approach to export promotion.

This extension comes at a time when India's export performance has shown mixed results. After three months of growth, exports contracted by 1.5 per cent to USD 33.98 billion in July, while the trade deficit widened to USD 23.5 billion.

However, the April-July period of the current fiscal year saw exports increase by 4.15 per cent to USD 144.12 billion, with imports rising by 7.57 per cent to USD 229.7 billion.

As global economic uncertainties persist, the extension of this scheme reflects the government's ongoing efforts to support and stimulate India's export sector, particularly focusing on small and medium-sized enterprises that form the backbone of the country's manufacturing exports.

(KNN Bureau)