Commerce Ministry Seeks Extension of Interest Equalisation Scheme

New Delhi, Aug 14 (PTI) The commerce ministry has sought further extension of the interest equalisation scheme on pre- and post-shipment rupee export credit to promote the country's outbound shipments, an official said on Wednesday.

The scheme will end this month.

Commerce Secretary Sunil Barthwal said that some schemes, including interest equalisation, are in different stages of their completion, so their renewal has to take place.

"Those discussions are still on with (department of) expenditure," he told reporters here.

Explaining further, Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi for the interest equalisation scheme, "There is a proposal for extending it and we are hopeful that it should come through in the next one month or so".

In June, the government extended the scheme on pre- and post-shipment rupee export credit for two months only for MSMEs.

Now the commerce ministry is seeking an extension for other exporters also.

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 scheme is fund-limited, and benefits to individual exporters are capped at Rs 10 crore per annum per IEC (Import Export Code).

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 implemented by the RBI through various public and non-public sector banks that provide pre- and post-shipment credit to exporters. It is jointly monitored by the Directorate General of Foreign Trade (DGFT) and RBI through a consultative mechanism.

From April 2023 - November 30, 2024, the government has disbursed Rs 2,641.28 crore against the allocated budget of Rs 2,932 crore under the scheme. Rs 3,118 crore was disbursed in 2022-23 and Rs 3,488 crore in 2021-22.

On the review of the Remission of Duties and Taxes on Export Products (RoDTEP), Saranagi said it is there till September.

"We will do a review in the meantime. The review takes place under the chairmanship of the finance secretary," he added.