New Delhi, Mar 26 (KNN) In a recent statement to the Lok Sabha, Minister of State for Commerce and Industry Jitin Prasada highlighted the critical role of the interest equalisation scheme in supporting Indian exporters, particularly micro, small, and medium enterprises (MSMEs).
Approximately 11,000 exporters are currently benefiting from this policy instrument, which aims to address the competitive challenges faced by Indian businesses in the global market.
The current lending landscape in India presents significant challenges for exporters, with the repo rate standing at around 6.25 percent and exporters typically incurring interest rates between 8 to 12 percent.
This stands in stark contrast to competing countries, where central bank rates are substantially lower: China at 3.1 percent, Malaysia at 3 percent, Thailand at 2 percent, and Vietnam at 4.5 percent.
Initially, the scheme provided comprehensive coverage, offering 3 percent interest equalisation for MSME exports and 2 percent for 410 identified product categories up to June 30.
From July 1, 2024, the scheme has been partially extended until December 31, 2024, with a focused approach targeting MSME manufacturer exporters, implementing a value cap of Rs 50 lakhs per exporter.
The government has strategically merged the Interest Equalisation scheme under the Export Promotion Mission, allocating a substantial budgetary provision of Rs 2,250 crore.
The mission’s primary objectives include facilitating export credit access, providing cross-border factoring support, and assisting MSMEs in navigating non-tariff measures in international markets.
In a complementary development, Prasada also revealed that a cumulative incentive amount of Rs 13,029 crore has been disbursed under the Production Linked Incentive (PLI) scheme across nine critical sectors.
These sectors include Large Scale Electronics Manufacturing, IT Hardware, Bulk Drugs, Medical Devices, Pharmaceuticals, Telecom & Networking Products, Food Processing, White Goods, and Drones, further underscoring the government’s commitment to boosting domestic manufacturing and export capabilities.
(KNN Bureau)
