Interest Equalisation Scheme for Exporters Extended till 30th September

Image used for representational purpose only. | Photo Credit: M. Murthy

The government has extended the Interest Equalisation Scheme on pre-shipment and post-shipment rupee export credit by one more month till September 30 to boost the country’s exports.

The scheme, which provided interest benefits to exporters, ended on August 31. It was extended for two months in June.

The Directorate General of Foreign Trade (DGFT) said in a trade notice, “Trade and industry are informed that the Interest Equalisation Scheme for Pre and Post Shipment Rupee Export Credit, earlier extended up to August 31 as a fund limited scheme, has been further extended by one month i.e. up to September 30, 2024.”

However, this extension is applicable only to MSME manufacturing exporters.

On December 8, 2023, the Union Cabinet approved an additional allocation of Rs 2,500 crore to continue the scheme till June 30.

The scheme helps exporters from identified sectors and all MSME manufacturer exporters to avail rupee export credit at competitive rates at a time when the global economy is facing difficulties.

Exporters get subsidy under Interest Equalisation Scheme for pre-shipment and post-shipment rupee export credit.

An additional outlay of Rs 2,500 crore over and above the current outlay of Rs 9,538 crore under the scheme has been made available to meet the funding shortfall for continuation of the scheme till June 2024.

The scheme was launched on April 1, 2015, and was initially valid for five years until March 31, 2020. It was subsequently continued, including an extension of one year during COVID-19, and further extensions and fund allocations.

The scheme is fund-limited, and individual exporters will be given benefits up to Rs 10 crore per year per IEC (Import Export Code) basis.

India’s exports fell 1.5% to $33.98 billion in July after remaining in positive territory for three months, while the trade deficit widened to $23.5 billion.

During April-July this fiscal, exports grew by 4.15 per cent to US$ 144.12 billion, and imports rose by 7.57 per cent to US$ 229.7 billion.