Directorate General of Foreign Trade (DGFT) under the Commerce Ministry has extended the interest equalisation scheme (IES) for pre and post-shipment rupee export credit for a month till September 30. However, the extension is applicable for MSME manufacturing exporters, DGFT said in a trade notice.
“This extension is applicable only for MSME manufacturing exporters. Apart from that, such extension is made with same terms and conditions as the present scheme,” the notice issued on August 31 said.
The scheme was earlier extended till August-end for MSME exporters from June this year while the claims of non-MSME exporters were accepted till June 30.
Started in April 2015 and initially valid for five years till March 2020, the scheme provides an interest equalisation benefit at the rate of 2 per cent on pre and post shipment rupee export credit to merchant and manufacturer exporters of the identified 410 tariff lines and 3 per cent to all MSME manufacturer exporters.
The scheme, implemented by the Reserve Bank of India (RBI) through various public and non-public sector banks, is currently fund limited with benefits to individual exporters capped at Rs 10 crore per annum per IEC (Import Export Code).
Importantly, the Union Cabinet chaired by Prime Minister Narendra Modi in December last year had approved an additional allocation of Rs 2,500 crore for the continuation of the scheme till June 30, 2024.
This was over and above the current outlay of Rs 9538 crore for the scheme while the estimated annual expenditure under the scheme is approximately Rs 2,500 crore, the cabinet had said in a statement in December.
Providing pre and post shipment packing credit at competitive rates is aimed at helping exporters become more competitive in global trade.
The share of export of MSME-specified products in all India exports during FY24 stood at 45.73 per cent, recovering after three years of decline. The share had dropped from 49.73 per cent in FY20 to 49.35 per cent in FY21, 45.03 per cent in FY22 and 43.59 per cent in FY23, FE Aspire had reported earlier.