EEPC seeks alternative to interest subvention scheme

Engineering Export Promotion Council (EEPC) of India has sought an alternative to interest subvention scheme as the WTO has been raising its objection to it, an official said on Saturday.

The Union government has been providing interest subvention to the extent of three to five per cent on bank credit, EEPC India Chairman Ravi Sehgal said here on Saturday.

"We need an alternative to the interest subvention scheme for availing bank credit since the World Trade Organisation (WTO) has been objecting to it. The scheme will not remain for long", he told PTI on the sidelines of an EEPC event here.

Presently, the banks are working on the matter, he said adding that a maximum interest rate of seven per cent for the MSME sector is being talked about.

According to Sehgal, not only interest subvention, the Merchandise Exports from India (MEIS) scheme is also being opposed by the WTO.

"In such circumstances, the engineering exporters are seeking refund of embedded taxes which constitute 12 to 13 per cent of the total cost of the items", he said.

With the government targetting USD 5 trillion economy by 2025, engineering exports should touch USD 200 billion by that period, Sehgal said.

Last fiscal, value of engineering exports was USD 81 billion, which is expected to be USD 85 billion by end of the current financial year.