Government of India has approved Rs. 600 crore (US $ 85.51 million) in subsidy to increase exports from sectors such as textiles, leather, handicraft and more. The decision was taken by the Cabinet Committee on Economic Affairs.
“The proposal will entail benefits of around Rs. 600 crore to exporters on interest equalisation for the remaining period of the scheme,” an official release said.
Post approval, merchant exporters will be included under the interest equalisation scheme for pre- and post-shipment rupee export credit. The addition of merchant exporters is likely to make them more competitive in the global export market.
They’ll be permitted interest equalisation rate of 3 percent on such credit for export of products covered under 416 tariff lines identified under the scheme.
These products are largely in MSME sectors such as textiles, leather, handicraft and machinery.
It is pertinent to add here that the interest subsidy scheme was introduced by the Centre in 2015 for manufacturing exporters. However, merchant exporters were not included back then.
Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta has said that the decision would promote exports from India.