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RBI extends interest subsidy scheme for exporters till March 2014

15 Jan 2013 Evaluate

In an effort to boost country’s exports, Reserve Bank of India (RBI) has extended the 2 per cent interest subsidy scheme for exporters in segments like handicrafts, carpets, SMEs and certain engineering goods, by one year till March 2014. Other sectors which will be benefited from the extension of Rupee Export Credit Interest Rate Subvention Scheme are, handlooms, readymade garments, processed agriculture products, sports goods, toys and 134 engineering good items (or tariff lines).

Under the scheme, banks would reduce the interest rate chargeable to the exporters as per Base Rate system in the select sectors eligible for export credit subvention by the amount of subvention available subject to a floor rate of 7%. Banks may ensure to pass on the benefit of 2% interest subvention completely to the eligible exporters.

Earlier also, the interest subvention scheme was extended till March 31, 2013 on pre and post shipment rupee export credit for certain employment orientated export sectors. However, this time around the government decided to widen the scheme to include certain goods from the engineering sector. A list of as much of 134 tariff lines of Engineering products was approved for inclusion in Interest Subvention for the period January 1, 2013 to March 31, 2013.

Country’s exports have been on declining spree past last eight months. Exports fell 1.9% year-on-year to $24.88 billion in December, whereas improved when compared to $22.3 billion recorded in November 2012.

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