Commerce Ministry Pushes For Continuation Of Interest Equalisation Scheme

The Commerce Ministry has requested an extension of the Interest Equalisation Scheme on pre- and post-shipment rupee export credit to support the country’s outbound shipments. Currently set to expire this month, the scheme is critical for exporters, particularly during global economic challenges.

Commerce Secretary Sunil Barthwal confirmed that discussions are ongoing with the Department of Expenditure regarding the renewal of several schemes, including interest equalisation. Director General of Foreign Trade Santosh Kumar Sarangi expressed optimism that the extension proposal will be approved within the next month.

In June, the government extended the scheme solely for MSMEs for two additional months. Now the Commerce Ministry is seeking an extension for other exporters also. The scheme offers subsidies on pre- and post-shipment rupee export credit, aiding exporters in accessing competitive credit rates.

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

Initially launched on April 1, 2015, and valid for five years, the scheme has been extended multiple times, including during the Covid-19 pandemic. The scheme is implemented by the Reserve Bank of India 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 and RBI through a consultative mechanism.

From April 2023 to Nov. 30, 2024, Rs 2,641.28 crore has been disbursed under the scheme out of an allocated Rs 2,932 crore. In comparison, Rs 3,118 crore was disbursed in 2022-23 and Rs 3,488 crore in 2021-22.

Additionally, Sarangi noted that the Remission of Duties and Taxes on Export Products scheme will be reviewed before its September deadline, under the oversight of the Finance Secretary.

(With inputs from PTI)