The Centre, on Thursday, approved a fresh package of Rs 500 crore in the form of interest subvention for exporters to compensate for the reduction in their profits due to rupee appreciation against the US dollar.

The government has already announced Rs 300 crore under the interest subvention scheme for exporters.

Achieve targets

“The measures will ensure mitigation of the effect of rupee appreciation across the export sectors, make them internationally competitive and will also enable them achieve export targets,” the official spokesperson told reporters after the meeting of the Cabinet Committee on Economic Affairs (CCEA) here.

Under the scheme, exporters are given two per cent relief in pre-shipment and post-shipment credit in sectors such as leather and leather products, marine products, handicrafts, textiles and carpets.

The interest subvention is subject to the condition that rates will not fall below seven per cent, the rate applicable to the agriculture sector under priority sector lending scheme, the spokesperson added.

The scheme, the official said, “will provide relief to exporters  and mitigate (their) hardships on account of unanticipated and steep rupee appreciation.”

The export of traditional items especially handicraft, textile and carpets have suffered on account of 15 per cent appreciation in the value of rupee against the dollar in the last 16 months.

Incidentally, the government has earlier announced various packages totalling Rs 5,200 crore to help the exporters.

Meanwhile, industry chamber Assocham welcomed the Centre’s decision for extending relief to exporters by way of providing interest subvention to mitigate their hardships on account of rupee appreciation. In a statement issued here, Assocham President Venugopal N Dhoot said the exporters were expecting relief package as indications were dropped from various policy makers describing “it a good decision which was announced without any delay.”