Indian exporters facing the heat in a shrinking global market are likely to get some relief soon in the form of cheaper credit.

The expenditure finance committee has approved the interest subvention scheme for select sectors formulated by the Commerce Ministry.

The proposed scheme, under which exporters from identified sectors will be provided credit at a subsidised interest rate, has been submitted to the Cabinet Committee on Economic Affairs (CCEA) for clearance.

“We are hoping that the CCEA will take up the matter soon and the scheme can be implemented,” a Government official told BusinessLine .

While most of the labour-intensive export sectors covered under the old subvention scheme will be included under the new scheme, some items from the pharmaceutical and engineering sectors may be added, the official added.

Beneficiary sectors under the old scheme, which expired in April 2014, included handicrafts, handlooms, carpets, readymade garments, processed agricultural products, engineering goods and the small and medium sector.

The interest subvention rate is likely to be fixed at 3 per cent — the same as the previous scheme.

The new scheme will be valid for three years and will be applicable with retrospective effect from April 1, 2015.

Banks providing the credit at the subsidised rate will be compensated by the Government.

Although the annual provision of ₹1,625 crore for the scheme in 2015-16 is only slightly more than ₹1,425 crore set apart two years ago, it is not likely to fall short as exports have been declining.

Export growth has been in the negative zone since December 2014 as a result of low demand in the Western markets as well as emerging markets, mostly in Asia.

Outbound shipments declined 20 per cent in May leading to exporters demanding a stimulus package.

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