RBI extends interest subsidy for exporters till March 2010

The Reserve Bank of India (RBI) today extended the interest subsidy of 2 per cent to exporters, battling demand recession in western economies, by six months till March 2010.

"It has been decided to extend interest subvention of 2 per cent on export credit for a further period of six months i.e. from October 1 till March 31, 2010," the RBI said in a statement.

With a view to insulate the employment-oriented sectors like handlooms, handicrafts, carpets, leather gens and jewellery and marine products, the government in its interim budget for 2009-10 had extended the period for concessional finance to exporters till September.

Exporters are facing payment defaults as several western economies like the US and members of EU are in the grip of recession.

After registering a handsome growth rate of over 30 per cent in the first half of the current fiscal, India's exports entered the negative zone in October 2008. In the previous fiscal, the overseas shipment has grew barely by 3.4 per cent to $168.7 billion.