India has extended the Interest Equalisation Scheme (IES) for Pre- and Post-shipment Rupee Export Credit until December 31, 2024, with the same terms and conditions as before. Previously, the scheme was extended by one month until 30 September 2024, with the additional condition that the fiscal benefits for each MSME would be capped at ₹5 million (~$59,648.60) for the current fiscal 2024-25.
The Ministry of Commerce and Industry issued a trade notice (No. 18/2024-2025) regarding this extension. MSME manufacturer-exporters who have already availed equalisation benefits of ₹5 million or more during the period up to September 30, 2024, will not be eligible for any further benefits during the extended period.
This extension will be valid for three months or until a revised approval is received before the end of the three-month period.
Under the scheme, banks offer loans to exporters at reduced interest rates, with the government compensating lenders for the difference. Exporters have also urged an increase in the subvention rates from 3 per cent to 5 per cent, citing a sharp rise in repo rates over the past two years.