Global Economy

Equalisation of interest for MSMEs extended till August 31

New Delhi: The Centre on Friday extended the interest equalisation scheme on pre- and post-shipment rupee export credit by two months for the micro, small and medium enterprises (MSMEs). The scheme, which seeks to promote outbound shipments by providing interest benefits to exporters, was to end on June 30.

It has now been extended to August 31 for MSMEs, the Directorate General of Foreign Trade (DGFT) said in a note. Claims of non-MSME exporters will not be entertained beyond June 30, it added. The apex exporters’ body, Federation of Indian Export Organisations (FIEO), expressed disappointment over the government decision to limit the extension to MSME exporters. In its note, the DGFT said the total outlay of the scheme for the extended period was capped at ₹750 crore.

On December 8, the Union Cabinet approved an additional allocation of ₹2,500 crore for the continuation of the scheme up to June 30. The scheme helps exporters from identified sectors and all MSME manufacturer exporters to avail of rupee export credit at competitive rates at a time when the global economy is facing headwinds. The scheme was started on April 1, 2015, and was initially valid for five years up to March 31, 2020. It was given a one-year extension during Covid-19 and more extensions and fund allocations since then.

FIEO president Ashwani Kumar said the decision was quite disappointing for exporters who are exporting products under 410 tariff lines (or product categories) if they are not MSME manufacturers. “This may affect labour-intensive exports, which have lost market share in the past few years, as many merchant exporters are playing a pivotal role in exporting such products, and exports of such products from some large companies may also be impacted,” Kumar said.


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