The government has extended the interest equalisation scheme on pre- and post-shipment rupee export credit for one more month till September 30 to promote the country's outbound shipments.
The scheme, which provides exporters interest benefits, ended on August 31. In June, it was extended for two months.
In a trade notice, the Directorate General of Foreign Trade (DGFT) said, "Trade and industry is hereby informed that the Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit, which had earlier been extended up to August 31 as a fund limited scheme, has been further extended for one month i.e., up to September 30, 2024." It said, however, this extension is applicable only for MSME manufacturing exporters.
On December 8, 2023, the Union Cabinet approved an additional allocation of Rs 2,500 crore for the continuation of the scheme up to June 30.
The scheme helps exporters from identified sectors and all MSME manufacturer exporters to avail of rupee export credit at competitive rates at a time when the global economy is facing headwinds.
Exporters get subsidies under the Interest Equalisation Scheme for pre- and post-shipment rupee export credit.
The additional outlay of Rs 2,500 crore, over and above the current outlay of Rs 9,538 crore under the scheme, was made available to bridge the funding gap to continue the plan up to June 2024.
The scheme was started on April 1, 2015, and was initially valid for five years up to March 31, 2020. It has been continued thereafter, including a one-year extension during Covid-19, and with further extensions and fund allocations.
The scheme is fund-limited, and benefits to individual exporters are capped at Rs 10 crore per annum per IEC (Import Export Code).
After remaining in the positive zone for three months, India's exports contracted 1.5 per cent to USD 33.98 billion in July, while the trade deficit widened to USD 23.5 billion.
Exports during April-July this fiscal year surged 4.15 per cent to USD 144.12 billion, and imports grew 7.57 per cent to USD 229.7 billion.