Interest equalisation, export subsidy schemes renewal under consideration: Sources

export support systems renewal under consideration

The government is reviewing the proposal for extending the interest equalisation scheme and a decision on it could be announced within a month or two, sources told Moneycontrol on August 12.

“There is a proposal for extending it and that proposal is under consideration. We are hopeful it should come through in the next one or two months,” a senior official stated.

However, it is not clear whether the scheme would apply to micro, small and medium enterprises or extend to other exporters as well.

The government in June had announced a two-month extension to the interest equalization scheme on pre- and post-shipment rupee export credit. However, the benefits were only extended to MSMEs, which could avail bank credit at a 3 percent interest subvention subsidy.

It had also capped the total outlay of the scheme to Rs 750 crore, noting that non-MSMEs claims will not be entertained beyond June 30.

The Cabinet in 2023 had approved an additional allocation of Rs 2,500 crore for the continuation of the scheme till June 30.

“The need of the hour is to take steps on the liquidity front with deeper interest subvention support and extension of interest equalisation scheme for at least 5 years,” said Ashwani Kumar, president, FIEO.

The government had allocated Rs 3,500 crore for the scheme in FY22, around Rs 3,100 crore in FY24 and had allocated Rs 2,932 crore in FY24 Budget.

The ministry besides interest equalisation is also conducting a review of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.

“We have extended the scheme till September 30. We are doing a review,” the person noted.

RoDTEP is aimed at refunding embedded taxes and duties on exported products to boost exports. The scheme was introduced in January 2021.