RBI interest subsidy scheme

RBI interest subsidy scheme

Subject: Economy

Section: Monetary Policy

Exporters get subsidy under the ‘Interest Equalisation Scheme for pre and post-shipment Rupee Export Credit’. Under the scheme, large manufacturing and merchant exporters get an interest subsidy of 3% on pre- and post-shipment rupee credit for the outbound shipment of 416 products (tariff lines). However, manufacturing MSMEs get a 5% subsidy on such credit to ship out any product. The interest equalisation scheme has immensely benefited the exporters, especially the small ones, as it has made credit available at reasonable costs.

The scheme, introduced in 2015, was initially valid up to March 2020. Its validity was then extended periodically, along with that of the foreign trade policy, up to September 2021.it has extended up to March 31,2024 or till further review, whichever is earlier. The interest equalisation rates under the scheme have been revised to 2 per cent and 3 percent for specified categories of MSME manufacturer exporters.

The scheme will not apply to telecom instruments and entities availing benefits under the Production Linked Incentive (PLI) scheme of the government.