Extension of Interest Equalization benefit to merchant exporters will boost MSMEs: FIEO
New Delhi, Jan 3 (KNN) The extension of Interest Equalization benefit to merchant exporters will help in increasing country's exports, said Ganesh Kumar Gupta, President, FIEO.
In respect of Micro, Small and Medium Enterprises he said that this will help the MSME sector as most of exports by the merchant exporters are in respect of products manufactured by MSME.
Therefore, the benefit will give a push to manufacturing in MSME creating job opportunities as well, said Gupta.
Responding to a long-standing demand from merchant exporters, the government has decided to make them eligible for its Interest Equalization scheme for pre- and post-shipment export credit that will bring down borrowing costs considerably.
Merchant exporters contribute to about 35% of country's exports and high cost of credit equally blunts their competitive edge, observed FIEO Chief, he said.
The Cabinet Committee on Economic Affairs gave its approval for the proposal of the Department of Commerce to include merchant exporters under the scheme by allowing them interest equalization rate of 3 per cent on credit for export of 416 tariff lines identified under the scheme.
Gupta mentioned that the support to merchant exporter is most timely as interest rates are moving northward in the country and the 3% subsidy will reduce their cost of operation significantly.