Extension of interest subsidy scheme to boost exports: Prabhu

Extension of 3 per cent interest subsidy scheme to merchant exporters will help them promote outbound shipments, Commerce Minister Suresh Prabhu said Thursday.

"Inclusion of merchant exporters in the scheme is expected to make them more competitive, encouraging them to export more products manufactured by MSMEs adding to country's exports," Prabhu said in a tweet.

The government yesterday decided to provide 3 per cent interest subsidy to merchant exporters, entailing an expenditure of Rs 600 crore, to enhance liquidity with a view to boosting outbound shipments.

Sectors that will be benefited from the decision include agriculture, textiles, leather, handicraft and machinery.

The interest equalisation or subsidy scheme for pre- and post-shipment rupee export credit started on April 1, 2015. The scheme will end in March 2020.

During April-November 2018-19, the country's merchandise exports grew by 11.58 per cent to USD 217.5 billion.

Prabhu had time and again raised the issue of declining export credit for exporters. He had suggested that loans to exporters should be considered as priority sector lending by banks.

A decline in export credit has hit exporters in general and MSME (micro, small and medium enterprises) units in particular.