India has extended the Interest Equalization Scheme (IES) for pre- and post-shipment rupee export credit for the next two months. The scheme was originally set to end on June 30, 2024. According to trade notice No. 07/2024-2025 issued by the Directorate General of Foreign Trade (DGFT), the government has extended the scheme for Micro, Small, and Medium Enterprises (MSME).
DGFT issued the notice on Friday. It stated that the extension applies only to MSME exporters. The total outlay of the scheme is capped at ₹750 crore (~$89.9 million), and the extension was made under the same terms and conditions as before.
Exporters had informed Commerce and Industry Minister Piyush Goyal of their concerns at a meeting held recently.
Under the scheme, banks provide loans to exporters at a lower interest rate, and the lenders are thereafter compensated by the government. Exporters also demanded an increase in subvention rates from 3 per cent to 5 per cent due to the steep rise in repo rates over the last two years.
During the meeting, exporters also raised concerns about the steep rise in container freight charges due to the monopoly of foreign shipping companies. They emphasised the need for a national shipping company to break this monopoly. The exporters also suggested setting up a division to address issues of non-tariff barriers globally.