The government has now included merchant exporters under the interest equalisation scheme for pre and post-shipment rupee export credit. The Cabinet Committee on Economic Affairs approved the proposal by Department of Commerce for extending the facility, which was available only to textile manufacturers and exporters.
Under the Interest Equalisation Scheme, exporters in the Micro, Small and Medium Enterprise (MSME) category can avail credit at 5 per cent on all pre and post-shipment on export of all products. While non-MSME get credit at 3 per cent on 416 specified tariff lines.
The coverage of merchant exporters under the Interest Equalisation scheme will encourage them to export more products from the MSME sector which contributes significantly towards employment generation especially for women, he added.
The move will also significantly reduce the cost of finance for the merchant exporters who contribute substantially towards textile exports and make them more competitive. Inclusion of cotton yarn under the scheme will encourage exports and benefit the cotton farmers.