The Federation of Indian Export Organisations (FIEO) said the proposal would immensely benefit micro, small and medium enterprises sectors which normally get credit at a much above rate compared to big corporates.
The MSME sector contributes about 40 per cent to the country’s exports. India’s exports are on the negative zone since last October . “There is a need to incentivise export credit for exporters to be globally competitive. If this happens , it will impart 3 per cent to 4 per cent competitiveness to Indian exports,” FIEO President A Sakthivel said. Under the proposed mechanism, all banks will be required to declare a base rate and charge interest rates over that depending upon the credit profile of the borrower and repayment period.
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