Engineering exports from the country could get a leg up with the Centre on Thursday bringing in 101 new engineering items under the fold of the two per cent interest subvention scheme.
The scope of the scheme has also been widened to include textile made-ups, Commerce and Industry Minister Anand Sharma, said after releasing the annual supplement to foreign trade policy here.
After the announcement, as many as 235 engineering sub-sectors can avail themselves of interest subvention, it was pointed out.
All the 101 additional engineering sub-sectors and the textile made-ups will be eligible for interest subvention during the period from May 1, 2013 to March 31, 2014.
Sharma said there had been a sincere effort on the Government’s part to expand coverage of the scheme.
As much as 45 per cent of India’s industrial output comes from small and medium enterprises and the entire sector is now covered under the scheme, Sharma said. He asserted that the scheme was not a subsidy, but only a cost of credit.
“Any understanding that interest subvention would invite the wrath of other countries is not correct,” he added.
EXPORT CREDIT COST
Some good news is likely to come the way of exporters on their cost of credit.
A technical group, constituted by the Reserve Bank of India, is likely to take a call by this month-end on new measures for reducing the cost of export credit (in foreign currency), Sharma indicated.
This group comprises senior officials from the Directorate General of Foreign Trade, Revenue Department and the RBI.
“As a Commerce and Industry Minister, I have always been in favour of lowering interest rates for increasing investments. In particular, affordable credit should be provided to both industry and exporters,” he said.
There are indications that the RBI may take a relook at the dollar swap window put in place to enhance the flow of credit to exporters. The effort will be to further improve the benefits under this facility, it is learnt.