ANNOUNCEMENT 12 Oct 2009In October 2009, the government of India announced a change in financial export support.
NUMBER OF INTERVENTIONS
On 12 October 2009, the Reserve Bank of India through Circular DBOD. Dir.(Exp).BC. No. 48/04.02.001/2009-10 extended the 2% interest subvention scheme on Rupee export credit to include exports of readymade garments under Textiles.
In a more general export credit prom otion scheme (see related measure),the RBI caps the interest rate on export credit at the Benchmark PrimeLending Rate (BPLR) minus 2.5 percentage points. Under the new scheme, designated sectors will receive a discount of up to 4.5 percentage points from the BPLR. However, the RBI demands that participants pay noless than 7 percent after the subvention.
This specific measure is valid for export credits advanced from 1 December 2008 to 31 March 2010. On 1 April 2010, the RBI removed ready made garments from the list of eligible sectors (see related measure).
The implementation date is set at 12 October 2009 as trade flows for readymade garments may only have been affected after the announcement.