The Indian exporting community on Sunday urged Finance Minister Nirmala Sitharaman to extend the interest equalisation scheme (IES) for getting affordable rates of credit, as their demand was not mentioned in the Budget.
The scheme ended on December 31 last year.
The scheme, according to exporters, has helped them avail of rupee export credit at competitive rates at a time when the global economy is facing headwinds. Exporters used to get subsidies under the scheme for pre and post-shipment rupee export credit.
Sanjay Budhia, Chairman of CII National Committee on EXIM, said though the Budget announcements would help boost outbound shipments, "we sincerely request the Finance Minister to kindly reinstate the scheme for all exporters to make them globally competitive".
Sharing similar views, Federation of Indian Export Organisations (FIEO) President Ashwani Kumar said the commerce ministry has allocated funds of Rs 2,250 crore under export promotion scheme of covering IES and MAI (market access initiative). The IES may be extended immediately with effect from January 1 with a cap of Rs 10 crore and international events for 2025-26 may be approved immediately.
Budhia also said that measures announced in the Budget such as cutting customs duties on certain inputs, and rolling out of national manufacturing mission would help boost exports and job creation.
He added that the proposed export mission to improve export credit, and support to MSMEs to tackle non-tariff measures in overseas markets would surely help in getting greater market access for domestic goods.
"The reduction of basic customs duty on several inputs for production and rationalisation of customs tariff structure for industrial goods will boost the export potential of the country significantly," Budhia, who is also MD of Patton Group, said.
Further, the new classification criteria for MSMEs to improve the access to credits for these units and startups will boost manufacturing prowess and improve export competitiveness of Indian industry, he added.
The scheme was started on April 1, 2015, and was initially valid for five years up to March 31, 2020. It has been continued thereafter, including a one-year extension during COVID-19 pandemic, and with further extensions and fund allocations.
In September last year, the government extended the scheme till December 31, 2024.
Earlier, the scheme provided an interest equalisation benefit at the rate of 2 per cent on pre and post-shipment rupee export credit to merchant and manufacturer exporters of 410 identified tariff lines (or product categories) at 4-digit level and 3 per cent to all MSME manufacturer exporters. These sectors include handicraft, leather, certain fabrics, carpets and readymade garments.
The scheme was implemented by the RBI through various public and non-public sector banks that provide pre and post-shipment credit to the exporters.
It is jointly monitored by the Directorate General of Foreign Trade (DGFT) and RBI through a consultative mechanism.
From April 2023 to November 30, 2024, the government disbursed Rs 2,641.28 crore against the allocated budget of Rs 2,932 crore under the scheme. Rs 3,118 crore was disbursed in 2022-23 and Rs 3,488 crore in 2021-22.
Commenting on the Union Budget 2025-26, Apparel Export Promotion Council Chairman Sudhir Sekhri said that the announcements will help the apparel sector compete globally.
"Ease in MSME financing, encouragement to farmers to produce extra- long staple cotton varieties, broad-based skilling programmes to spur employment, regulatory reforms and support to startups will surely accelerate growth," he said.
Mithileshwar Thakur, Secretary General AEPC said that the steps taken towards establishment of Export Promotion Mission, creation of a unified digital platform BharatTradeNet to streamline export documentation and finance issues, support to MSMEs by facilitating easier access to credit will drive manufacturing and export growth story.
