India: Pre and post shipment export credit
Description
On 1 December 2008, the Bank of India implemented an export credit scheme as part of the Indian government's crisis response programme. Under the scheme, companies from designated sectors will have access to low-interest export credit. The scheme was initially set up to last until 31 March 2009 but has been extended to 31 September 2010.
As specified by the Bank of India, companies may apply for rupee pre-shipment credit for up to 270 days and post-shipment credit for up to 180 days. Participating firms will receive an interest rate that is at maximum 2 percent lower than comparable market rates. This subsidy is limited for the definitive interest rate not to fall below 7 percent.
Sectors and companies elegible to the interest rate reduction:
- Textiles (including Handloom)
- Handicrafts
- Carpets
- Leather
- Gems and Jewellery
- Marine Products, and
- Small & Medium Enterprises
Any Evidence-Based Deliberation:
| Question | Result |
|---|---|
| Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations? | No |
| Is there any evidence that alternatives to the proposed measure were considered? | No |
| Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government? | No |
| Was such evidence identified? | No |
| Is such evidence publicly available? | No |
| Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives? | No |
| Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken? | No |
| Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory? | No |
| Did the government state its intention to review the measure within one year of implementation? | No |
Date Discovered:
Implemented: Yes
Date of inception: 16 Dec 2008
GTA Evaluation: Red
Source:
Reserve Bank of India. (16 December 2008). Interest Rates on Rupee Export Credit. To be obtained at
http://rbidocs.rbi.org.in/rbiadmin/scripts/NotificationUser.aspx?Id=4712...
Reserve Bank of India. (11 June 2009). Rupee Export Credit Interest Rates. To be obtained at
http://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5043&Mode=0
Reserve Bank of India. (31 July 2009). Rupee Export Credit Interest Rates. To be obtained at
http://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5193&Mode=0#1
Government Response:
- 1792 reads
