Ministry of Commerce & Industry has announced Interest Equalisation Scheme (earlier called Interest Subvention Scheme) on Pre- & Post-Shipment Rupee Export Credit; to be effective from April 1, 2015 for five years. Under this Interest Equalisation Scheme the rate of interest equalization would be 3 per cent. The scheme would be available to all exporters of MSME and 416 tariff lines but not for merchant exporters. CCEA (The Cabinet Committee on Economic Affairs) chaired by the Narendra Modi, has also given its approval for Interest Equalisation Scheme on Pre- & Post-Shipment Rupee Export Credit. The scheme will be evaluated after three years. It will help the identified export sectors to be internationally competitive and achieve higher level of export performance.
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Interest Equalisation Scheme will cover the list of 416 tariff lines including sectors like readymade garments and made ups (Ch 61-63, All lines, No. of HS4 lines 42), fabric of all types (all lines, No. of HS4 lines 33), handicraft (all lines, No. of HS4 lines 37), raw jute, yarn (all lines No. of HS4 lines 2). The scheme will be funded from the funds available with Department of Commerce under non-plan side during 2015-16 and the restructured scheme would be funded from plan side from 2016-17 onwards.
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On completion of three years of operation of the scheme, Department of Commerce may initiate a study on impact of the scheme on export promotion and its further continuation. The operational instructions of the Interest Equalisation Scheme would be issued by RBI. Financial implication of the proposed scheme is estimated to be in the range of Rs. 2,500 crore to Rs. 2,700 crore per year.
