To boost MSME sector exports the interest subsidy on post and pre-shipment export credit has been increased to 5% from 3%.
Exporters get the subsidy under the ‘Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit’.
“It has been decided by the Government of India to increase Interest Equalisation rate from 3% to 5% in respect of exports by the Micro, Small & Medium Enterprises (MSME) sector manufacturers under the Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit,” the RBI said in a notification.
The scheme (earlier called Interest Subvention Scheme) was announced by the government in November 2018 for all exports of MSME and 416 tariff lines. The scheme covers mostly labour intensive and employment generating sectors like processed agriculture/food items, handicrafts, readymade garments, glass and glassware, medical and scientific instruments, and auto components/parts, among others.