India's Interest Equalization Scheme: 11,000 Exporters Benefit

New Delhi, Mar 25 (PTI) The government on Tuesday said about 11,000 exporters avail the benefits under the interest equalisation scheme to get credit at concessional interest rates.

Interest equalisation has been an important policy instrument, especially for MSME exporters, for bringing down the higher cost of credit incurred by Indian exporters vis-a-vis their foreign competitors, Minister of State for Commerce and Industry Jitin Prasada said in a written reply to the Lok Sabha.

In India, the repo rate stands at about 6.25 per cent, with exporters bearing interest rates ranging between 8 to 12 per cent or even more, depending on the spread and risk assessment of the borrower by the Authorised Dealer Banks.

In competing countries, the interest rate is very low. For instance, the central bank rate in 2025 is 3.1 per cent in China, 3 per cent in Malaysia, 2 per cent in Thailand, and 4.5 per cent in Vietnam.

"Approximately, 11,000 exporters avail the benefits under the scheme," he said.

Up to June 30, the scheme covered all exports made by Micro, Small and Medium Enterprises (MSMEs) at 3 per cent interest equalisation or subvention, and 410 identified product categories at 2 per cent.

From July 1, 2024, onwards, the scheme has been partially extended till December 31, 2024, for MSME manufacturer exporters with a value cap of Rs 50 lakhs per exporter.

"Presently, Interest Equalisation has been merged under the Export Promotion Mission in which a budgetary allocation of Rs 2,250 crore has been made," Prasada said, adding the government is undertaking stakeholder consultation with regard to the mission.

The focus is on facilitating easy access to export credit, cross-border factoring support, and backing MSMEs to tackle non-tariff measures in overseas markets.

In a separate reply, he said a cumulative incentive amount of Rs 13,029 crore has been disbursed till December 2024 under PLI (production linked incentive) scheme for nine sectors, including Large Scale Electronics Manufacturing, IT Hardware, Bulk Drugs, Medical Devices, Pharmaceuticals, Telecom & Networking Products, Food Processing, White Goods, and Drones.