Prior to this June, the program was extended until August 31 for MSME exporters, while it was extended through June 30 for non-MSME exporters.
Directorate General of Foreign Trade (DGFT) has extended the interest equalisation scheme (IES) for pre-and-post shipment rupee export credit for three months from September 30 to December 31, 2024, to support exporters. The extension applicable for MSME manufacturing exporters will be effective “with the additional condition that fiscal benefits of each MSME, on aggregate, will be restricted to Rs 50 lakhs for FY 2024-25 till December 2024,” the trade notice said on Monday.
Moreover, MSME manufacturer exporters who have already availed equalisation benefits of Rs 50 lakhs or more in 2024-25 till September 30 will not be eligible for any further benefit in the extended period.
The scheme was earlier extended till September 30 from August end for MSME exporters while the claims of non-MSME exporters were accepted till June 30.
“To challenge global manufacturing leaders like China, where MSMEs contribute 60 per cent to GDP and 65 per cent to exports, Indian MSMEs must prioritize quality, innovation, and scalability. By alleviating their financial vows, the IES enables MSMEs to invest in innovation, elevate quality standards, and facilitate entry into new international markets,” Kanishk Maheshwari, Co-Founder and Managing Director, Primus Partners told FE Aspire.
Launched in April 2015 and initially valid for five years till March 2020, the scheme offers 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 the identified 410 tariff lines and 3 per cent to all MSME manufacturer exporters.
Last month, the government had imposed an interest subvention cap of Rs 5 crore per IEC (import-export code) for MSME manufacturers till September 30, 2024, for the current fiscal. In a trade notice on September 17, the Directorate General of Foreign Trade (DGFT) announced the amendment under the Interest Equalisation Scheme (IES) with immediate effect “for rationalisation of the scheme.”