Commerce Ministry Mulls Five-Year Extension for Interest Equalisation Scheme

The Government of India introduced the Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit to support eligible exporters, with its inception dating back to April 1, 2015. This initiative plays a crucial role in assisting exporters from specific sectors and MSME manufacturers by facilitating access to export credit in rupees at competitive rates, particularly amidst the current global challenges.

The Interest Equalization Scheme is applicable to merchant and manufacturer exporters of 410 tariff lines at the 4-digit level. The scheme provides a 2% interest equalization benefit on pre and post shipment Rupee export credit, and a 3% benefit to MSME manufacturer exporters.

Originally designed for a five-year period, ending on March 31, 2020. As of now, it is set to expire on June 30, 2024. To ensure the continuation of the plan until June 2024, an additional outlay of Rs 2,500 crore was allocated, supplementing the existing outlay of Rs 9,538 crore.

The scheme, now operating as a fund-limited program, imposes a cap of ₹10 crore annually per Import Export Code (IEC) for individual exporters.

Acknowledging the scheme’s positive impact on outbound shipments, the Commerce Ministry is contemplating a further extension for another five years, with the aim of bolstering the country’s export activities.