ANNOUNCEMENT 18 Nov 2015
In November 2015, the government of India announced a change in financial export support.
NUMBER OF INTERVENTIONS
Official press release - 18 November 2015
RBI document on implementing the scheme - 4 December 2015
Extension of the scheme - 13 May 2020
On 18 November 2015, the Indian Cabinet Committee on Economic Affairs approved an Interest Equalisation Scheme (earlier known as the Interest Subvention Scheme) that essentially provides an interest rate subsidy on Pre & Post Shipment Rupee Export Credit. The rate of this subsidy will be 3% and has been provided retrospectively from 1 April 2015 for a period of 5 years. The subsidy is available to Micro Small and Medium Enterprises in exports of 416 tariff lines (at the HS 4-digit level) that are labour intensive and employment generating. The scheme is not available to merchant exporters.
To be eligible for subsidy under this scheme, the exported goods will have to meet the minimum criteria for processing of goods to be called as Originating from India and will be governed by the Rules of Origin provisions. According to the official press release, the scheme will have a financial implication of Rs.2500 to Rs. 2700 crore (appx. USD 370 to USD 400 million) annually.
The procedure for the implementation of the scheme was published by the Reserve Bank of India on 4 December 2015.
On 13 May 2020, the Reserve Bank of India notified that the scheme has been extended for an additional year i.e. from 1 April 2020 to 31 March 2021.
*USD to INR conversion is done at INR 67.15/USD