Interest Equalisation Scheme Extended for MSME Exporters

News Excerpt:

The Department of Commerce has extended the Interest Equalisation Scheme for pre- and post-shipment rupee export credit for Micro, Small, and Medium Enterprises (MSME) exporters until August 31.

More About News:

  • According to a trade notice, the budget for this extension is ₹750 crore, and it does not apply to non-MSME exporters beyond June 30.
  • This extension will benefit the labor-intensive garment sector, which predominantly consists of MSME units.
  • Currently garment exporters are struggling with higher interest costs in India compared to other competing countries.

Interest Equalisation Scheme

  • The scheme, which began on April 1, 2015, was originally intended to last for five years, concluding on March 31, 2020.
  • However, it has been extended multiple times, including a one-year extension during the COVID-19 pandemic, along with additional funding allocations.
  • Currently, the scheme offers a 2% interest subvention or subsidy on loans for exporters from 410 identified sectors, and a 3% subvention for all products exported by the MSME sector.

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