Industry body Assocham on Monday asked the Government to provide interest subsidy benefit to select sectors in order to boost the country's exports. The main reasons for decline in exports are high cost of credit, appreciation of rupee against euro and steep fall in crude oil prices, besides global demand slowdown, it said in a statement.
It also said that India's export competitiveness has been eroded due to steady real appreciation of rupee. Interest rate subvention scheme for same select sectors need to be announced at the earliest to boost exports, it said.
“Presently, micro, medium and small enterprises sector gets loans at 12-13 per cent. After subvention, this would come down to 9-10 per cent. However, India's competitors get it at around 5 per cent,” the chamber said. Besides MSME, other sectors where the interest subsidy benefits could be extended include leather, handicrafts, engineering and textiles.
Further, it said that given the current scenario, it could be difficult to achieve the export target of $900 billion by 2019-20. Transaction costs are also high for exporters which needs to be looked at, Assocham said.