‘Export sops offer limited relief’

THE CABINET'S APPROVAL for a 45,060 crore package that will see return of the interest subsidy scheme and enhanced credit guarantee for exporters can bring down cost of credit by 2-3% and offer some relief, but may not fully address tariff and other challenges they face, according to industry and experts.

- MUKESH JAGOTA

The Credit Guarantee Scheme covers 20% of the sanctioned limit making it collateral-free thereby reducing the interest rate for such exporters. The Interest Equalisation Scheme (IES), announced as part of the 6-year Export Promotion Mission (EPM), will cover the entire working capital requirement, and provide 3% subvention.

“While the overall interest burden will come down over 3%, the flow of credit will increase substantially, which is the need of the hour as well. While it may not address the issue of tariff challenges, it will help in diversification and overall reduction in the burden on our micro small and medium enterprises (MSMEs)in particular,’ director general and CEO of Federation of Indian Export Organisations Ajay Sahai said.