Interest Equalisation Scheme Gets Capped at Rs 2.5 Crore Per Importer Exporter Code For June Quarter
The government has imposed a cap of Rs 2.50 crore per Importer Exporter Code under Interest Equalization Scheme for the quarter ending June 30, 2024.
The Interest Equalization Scheme introduced in 2015 to provide pre and post-shipment export credit to exporters in Indian rupee was originally slated for a five-year duration till March 31, 2020. However, it has since been extended multiple times, including a one-year extension amidst the Covid-19 pandemic, along with additional extensions and allocations of funds.
Last year, the government had announced an extension of the Interest Equalization Scheme for pre and post-shipment rupee export credit until June 30, 2024. It had also announced an additional allocation of Rs 2500 crore, over and above the current outlay of Rs 9538 crore, for the continuation of the scheme. Under this extension, manufacturers and merchant exporters dealing with specified 410 HS lines will benefit from a 2 per cent interest equalization rate, while MSME manufacturers exporting under any HS line will receive a higher rate of 3 per cent.
From the financial year 2023-24, banks pricing loans covered under the scheme at an average interest rate higher than the Repo rate + 4 per cent will face specific restrictions. Further, the annual net subvention amount has been capped at Rs 10 crore per Importer-Exporter Code (IEC) in a given financial year.
Now the government has brought in a cap of Rs 2.5 crore for the June quarter of FY25.
According to the government, the scheme has disbursed Rs 3488 crore in FY22, Rs 3118 crore in FY23 and had a budgetary allocation of Rs 2932 crore in FY24.
