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Exports get boost as CCEA approves 3% interest equalisation scheme |
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India's falling exports got a booster shot on Wednesday with the Cabinet Committee on Economic Affairs approving a scheme to provide cheaper credit to exporters for three years.
The CCEA approved an interest equalization scheme on pre and post shipment rupee export credit with effect from April 1, 2015 for three years at 3% per annum for all exports of small and medium enterprises besides 416 specific tariff lines in agri processing, handloom, handicrafts, jute, paper, ceramics, medical/scientific instruments and auto components, among others.
"Financial implication of the scheme is estimated to be Rs 2,500-2,700 crores. Labour intensive and employment generating sectors to benefit," tweeted commerce and industry minister Nirmala Sitharaman.
The support has come at a time when India's exports declined for the eleventh month running in October, highlighting the stiff competition faced by the country in a weak global economy.
This is the second time this week that the government has incentivized exporters. The government had revised the duty drawback rates for exporters two days ago and raised the drawback by 2% for engineering goods, marine products, textiles and leather products.
As per data released earlier this week, exports fell 17.5% year on year in October at $21.35 billion and outward shipments declined in 20 out of the 30 industries, led by iron ore.
Sluggish global demand, an overvalued rupee, declining imports from China and devaluation of the Chinese currency have deterred India's exports from growing despite the commerce department expanding export incentive schemes for various products and markets and there raising doubts on the total exports this year even reaching $300 billion.
Exports in the first seven months of the year were about $154.2 billion. In 2014-15, India's exports had totalled $310.5 billion. In the 2015-16 Budget, finance ministry had allocated Rs 1,650 crore for the interest subvention scheme for exporters for the year.
The previous 3% interest subvention scheme was available up to March 31, 2015 for sectors including apparel, carpets, handlooms, sports goods, handicrafts, toys, and some engineering products. The rate offered under the scheme in 2013-14 was 2%.
Source : economictimes.indiatimes.com
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