Worried over the downward trend of the exports and to boost overseas shipments, which has been slowing since last December, the Government is likely to extend the interest subsidy scheme for exporters for the next 3 years. The ministries of commerce and finance are working on the issue and their decision is likely to be sent to Cabinet for approval.
Under the interest subvention scheme, exporters get loans at affordable rates. Loans at subsidised rates would help exporters to boost shipments as the country's exports have been in the negative zone for the past seven months, impacted by global slowdown, high interest rates. Earlier, eight sectors including handicrafts, handlooms, carpets, sports goods, and few engineering products were availing the benefit of this scheme. The scheme of 3 per cent interest subvention ended on March 31, last year. The Federation of Indian Exports Organisation (FIEO) has demanded it to be extended retrospectively from April 2014.
The Commerce Ministry is taking several steps to boost exports, which have been hovering at around $300 billion for the last four financial years. It is involving states in pushing the shipments. Besides, in order to reduce transactions cost for exporters, it has also taken steps towards promoting ease of doing business. High growth in exports would help boost manufacturing activities and overall economic growth.
Impacted by global slowdown, India’s exports contracted for the eighth straight month by 10.3 per cent in July to $23.13 billion, pushing the trade deficit to $12.81 billion. Exports registered a positive growth last was in November, when shipments expanded at a rate of 7.27 per cent.