Budget 2024: EEPC urges revival of interest subvention scheme for exporters

The Engineering Export Promotion Council (EEPC India) has urged the government to revive the interest subvention scheme for exporters in its pre-budget recommendations.

EEPC India Chairman Arun Kumar Garodia emphasised the scheme's importance, especially with rising interest rates.

He called for restoring the three per cent subvention rate for specific tariff lines and a 5 per cent rate for MSME exporters across all product categories.

The recent exclusion of merchant exporters from the Interest Equalisation Scheme (IES) raised concerns. EEPC India argued that merchant exporters, with low profit margins, are significantly impacted by credit costs. They proposed extending the IES benefits to them with a three per cent subvention rate.

A government notice extended the IES for two months, but only for MSMEs. This left merchants and large exporters ineligible after June 30.
 

The apex engineering exports promotion body warned this exclusion could hurt these businesses, especially those in competitive sectors.

The recommendations also included reinstating a 150 per cent weighted deduction for R&D expenses, offering 100 per cent depreciation for MSME investments in solar power generation and implementing a 25 per cent income tax slab for MSME manufacturing units with reinvestment conditions.

EEPC India said it represents nearly 9,500 member companies (over 60 per cent MSMEs), and the industry is a major contributor, accounting for 25 per cent of total exports and the highest foreign exchange earner.