The Directorate General of Foreign Trade ( DGFT ), vide trade notice no. 40/2023-2024 dated 20th March 2024 has issued an amendment under the Interest Equalization Scheme. The authority is to impose a cap of Rs. 2.5 crores per IEC from 1st April 2024 to 30th June 2024.
The notice states as follows:
“Attention of Trade and Industry is drawn towards the extension of Interest Equalization Scheme ( IES ) upto 30.06.2024, as notified by RBI vide its Circular No. DOR.STR.REC. 78/04.02.001/2023-24 dated 22.02.2024.
In this regard, it may be noted that a cap of Rs. 2.50 Cr per IEC is imposed till 30.06.2024 for the quarter starting from 01.04.2024.”
The Interest Equalization Scheme is a government initiative designed to aid exporters in preserving their competitive edge in the global market. Through this program, the government provides subsidies on interest rates for loans acquired by exporters, primarily for pre-shipment and post-shipment credit purposes.
The Government has recently extended the duration of the Interest Equalization Scheme for pre and post-shipment rupee export credit, now effective until June 30, 2024.
Furthermore, the Union Cabinet has sanctioned an extra allocation of Rs. 2500 Crore to prolong the sustainability of the Interest Equalization Scheme until June 30, 2024. This decision is geared towards offering assistance to exporters operating within specified sectors, as well as all MSMEs engaged in manufacturing and exporting.
The extension of the scheme allows these entities to avail competitive rates for both pre and post-shipment Rupee export credit, thus nurturing a favourable environment for their international trade endeavours.
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