BJP leader Piyush Goyal.
Credit: PTI Photo
Kolkata: A body of exporters has written to Union Commerce and Industry Minister Piyush Goyal, expressing concerns over the extension of the Interest Equalisation Scheme (IES) for only two months and exclusively for MSMEs.
Federation of Indian Export Organisations (FIEO) president Ashwani Kumar highlighted that the scheme has so far benefitted not only MSMEs but also merchant exporters and large manufacturing companies at a lower rate of two per cent for 410 tariff lines, covering labour-intensive products.
The current scheme, valid till June, provides pre and post-shipment rupee export credit, offers a two per cent interest equalisation rate for manufacturers and merchant exporters dealing with specified 410 export items, and a higher rate of three per cent for MSME manufacturers exporting under any of these items.
Kumar pointed out that the exclusion of these categories from the extended scheme will severely impact labour-intensive exports, which have already been struggling in recent years.
He urged the minister to intervene and restore the status quo, citing the export sector's challenges, including increased freight rates, longer voyage times, and rising interest rates.
Kumar warned that the withdrawal of IES benefits will blunt the competitive edge of exporters and hinder growth momentum.
In contrast to FIEO's demand for an extension of the scheme benefits at a higher rate, the Directorate General of Foreign Trade (DGFT) restricted the benefits to MSMEs and capped the total outlay of the scheme at Rs 750 crore.