Small exporters to get interest subsidy

Government fixes 3% rate for five years

Exporters from labour-intensive, small and medium sectors can now avail bank loans at three per cent lower rates with the government on Wednesday approving the long-awaited interest subsidy scheme to boost exports.

The scheme will help the identified export sectors to be internationally competitive and achieve higher level of export performance, Power Minister Piyush Goyal said after a Cabinet meeting chaired by Prime Minister Narendra Modi which approved the scheme.

He said the scheme will cover the labour-intensive and employment generating sectors like processed agriculture, handicrafts, handmade and handloom products, fabrics, leather goods and toys among others manufactured by small sectors.

The scheme will be available for all exports of MSME but will not be available to merchant exporters, an official statement after the Cabinet meeting said.

The scheme will be in effect for five years from April 1, 2015. At the end of three years, the government will review the impact of the scheme on export promotion.

India’s exports have suffered decline in the past 11 months casting a doubt on the Prime Minister’s aim to increase the country’s overseas shipment to $900 billion by 2019-20.

Goyal said with the latest incentive, exports will grow more. He, however, said that the fall in exports was mostly due to a sharp drop in petroleum exports because of low global prices.