Home» Circulars» V. Imp Cabinet Allows Inclusion Of Merchant Exporters Under Interest Equalisation Scheme Ies For Pre And Post Shipment Rupee Export Credit

 

 

Dear Members,   We are pleased to inform you that  The Cabinet Committee on Economic Affairs  (CCEA) chaired by the Honourable  Prime Minister Shri Narendra Modi, has given its approval to the proposal of the Department of Commerce for including merchant exporters under the Interest Equalisation Scheme (IES) for Pre and Post Shipment Rupee Export Credit by allowing them interest equalisation rate of 3% on such credit for export of products covered under 416 tariff lines identified under the scheme. These products are largely in MSME/ labour intensive sectors such as Agriculture, Textiles, Leather, Handicraft, machinery, etc.   As per the PIB release dated 02/01/2019  (http://pib.nic.in/PressReleseDetail.aspx?PRID=1558202) ,  the proposal will entail benefits of around Rs 600 crore to exporters on interest equalisation, for the remaining period of the scheme.   Inclusion of merchant exporters in the scheme is expected to make them more competitive, encouraging them to export more products manufactured by MSMEs adding to country's exports. Additional exports by them will increase production by MSME giving a fillip to employment generation as MSME are generally in the employment intensive sectors.   The present scheme, which is in-force from 1.4.2015 for five years, provides interest equalization rate of 3% on Pre and Post Shipment Rupee Credit tor all manufacturing exporters exporting identified 416 four digit tariff lines and 5% on all merchandise products manufactured and exported by MSMEs. Merchant exporters were hitherto not covered under the scheme. The council/ other trade bodies have been persistently demanding inclusion of the merchant exporters also in the ongoing scheme as merchant exporters play an important role in finding overseas markets, getting export orders, communicating to MSME manufacturers the current preferences, trends and demand for products in international export markets. High cost of credit equally impact their competitiveness also as they factor the high interest costs in their export costing.   We shall have exact details once the   relevant notification is issued by RBI.   The council shall update you  accordingly.   Thanking You, Yours faithfully,   S.G. Bharadi Executive Director Chemexcil