Federation of Indian Export Organisations : FIEO, the apex body of exporters, on Tuesday,, urged the government to extend the interest subvention scheme for five years to increase credit flow to the sector to boost the country's exports. Exports had fallen 9.3 percent to $34.71 billion in August, the biggest decline in 13 months. This month, the government had extended the Interest Equalization/Subsidy Scheme by one more month till September 30. Under the scheme, interest benefit is provided on rupee export credit before and after export.

The scheme will expire on September 30

“The scheme will expire on September 30. We have requested to extend it for five years,” Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO), told reporters here.

If the interest equalization scheme is not there, we will lose some markets and some orders." The scheme helps exporters from identified sectors and all MSME (micro, small, and medium enterprises) manufacturer exporters to get rupee export credit at competitive rates at a time when the global economy is facing difficulties.

Subsidy under the Interest Equalization Scheme

Exporters get subsidies under the Interest Equalisation Scheme for Rupee Export Credit before and after export. The scheme was implemented on April 1, 2015, for a period of five years till March 31, 2020.

It was subsequently continued, including a one-year extension during the COVID-19 pandemic, and further extensions and fund allocations. The scheme is fund-limited, and individual exporters will be given benefits up to Rs 10 crore per year per IEC (Import Export Code) basis.

Contribution of MSMEs in production

FIEO President Ashwani Kumar said more than 50 percent of production in India is done by MSMEs, which are facing financing problems. Meanwhile, FIEO signed a Memorandum of Understanding (MoU) with 'Stan', an online platform for financing small and medium-sized enterprises (SMEs) engaged in global trade.

The objective of this MoU is to provide financial solutions to address liquidity challenges and enhance the competitiveness of Indian businesses, especially SMEs, in the global market.

Kumar said, "This collaboration aims to boost export growth by providing the necessary financial 'channel' to SMEs to scale up their operations and take advantage of international opportunities.