Extension of Interest Equalisation Scheme for Exporters: Commerce Ministry’s Budget Proposal
NEW DELHI: The Commerce Ministry is gearing up to push for an extended lifeline to the interest equalisation scheme in the upcoming budget. The scheme, which focuses on pre- and post-shipment rupee export credit, is expected to receive a five-year extension to bolster the nation’s exports, as revealed by an official source. Previously set to expire on December 31 of last year, the scheme has been instrumental in providing crucial support to exporters navigating the choppy waters of the global economy.
Impetus for Extension
The Interest Equalisation Scheme has been a beacon of hope for exporters in selected sectors and all MSME manufacturer exporters, offering them access to rupee export credit at competitive rates. This comes at a time when the global economy is grappling with uncertainties and challenges. Under the scheme, exporters benefit from subsidies for pre- and post-shipment rupee export credit, ensuring they remain competitive in the international arena.
Historical Context
Initially launched on April 1, 2015, the scheme was slated to run for five years until March 31, 2020. However, it has seen multiple extensions, including a one-year prolongation during the COVID-19 pandemic. In a recent development, the government extended the scheme until December 31, 2024, underscoring its significance in supporting the export community.
Support for Extension
With the looming deadline for the Union Budget presentation on February 1, exporters are rallying behind the call for an extension. The Federation of Indian Export Organisation (FIEO) President, Ashwani Kumar, emphasized the pivotal role of the scheme in enhancing the competitiveness of Indian exporters globally. Kumar highlighted the favorable lending rates in countries like China and urged the government to consider extending the scheme to sustain the momentum in the export sector.
In conclusion, the extension of the Interest Equalisation Scheme holds immense promise for exporters, providing them with the necessary financial backing to navigate the challenging economic landscape. As stakeholders eagerly await Finance Minister Nirmala Sitharaman’s budget announcement, all eyes are on the potential impact of this proposed extension on India’s export trajectory.
