Cabinet allows inclusion of merchant exporters under IES

The 3 per cent rate would be available on such credit for export of products covered under 416 tariff lines identified under the scheme. The products covered under the IES are largely in MSME/labour intensive sectors such as agriculture, textiles, leather, handicraft, machinery, etc.

“The proposal will entail benefits of around ₹600 crore to exporters on interest equalisation, for the remaining period of the scheme,” an official statement said.

“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 the country’s exports. Additional exports by them will increase production by MSME giving a fillip to employment generation as MSME are generally in the employment intensive sectors,” the statement added.

The present scheme, which is in-force from April 1, 2015 for five years, provides interest equalisation rate of 3 per cent on pre and post shipment rupee credit to all manufacturing exporters exporting identified 416 four-digit tariff lines, and 5 per cent on all merchandise products manufactured and exported by MSMEs. Merchant exporters were hitherto not covered under the scheme.

Exporting community has been persistently demanding inclusion of the merchant exporters also in the ongoing scheme. Merchant exporters play an important role in finding overseas markets, getting export orders, communicating to MSME manufacturers the current preferences, trends and demand for products in international export markets.

Merchant exporters also play a pivotal role in exports of MSME manufacturers as MSME manufacturers export significant quantity of products through them. High cost of credit equally impacts their competitiveness as they factor the high interest costs in their export costing. (RKS)

ALCHEMPro News Desk – India