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Centre extends Interest Equalization Scheme to boost pharma export credit
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Shardul Nautiyal, Mumbai
February 28 , 2024
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In a move aimed at providing a significant boost to India's pharma export sector, the Government of India has announced the extension of the Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit until June 30, 2024. The decision, which comes as a relief to manufacturers and merchant exporters, is expected to enhance competitiveness and facilitate smoother trade operations.
The scheme, which was set to expire, has been extended to provide continued support to exporters amid challenging economic conditions. Under the extended scheme, manufacturers and merchant exporters dealing with specified 410 HS lines will benefit from a 2% interest equalization rate. Moreover, Micro, Small, and Medium Enterprises (MSME) manufacturers will enjoy a higher rate of 3%, further incentivizing their participation in export activities.
The extension of the Interest Equalization Scheme underscores the government's commitment to promoting exports and revitalizing the economy. By reducing the cost of credit for exporters, the scheme aims to enhance their competitiveness in global markets and encourage greater participation in international trade.
Udaya Bhaskar, director general of the Pharmaceuticals Export Promotion Council of India (Pharmexcil), welcomed the government's decision, emphasizing its potential to stimulate export growth and bolster the resilience of Indian businesses amidst evolving global dynamics. Bhaskar noted that the scheme's extension would provide much-needed relief to exporters grappling with the challenges posed by the ongoing pandemic and other external factors.
The Reserve Bank of India (RBI) Notification No. RBI/2023-24/124, dated February 22, 2024, serves as a regulatory framework for the implementation of the extended scheme. The notification outlines the eligibility criteria and operational guidelines for availing the benefits of the Interest Equalization Scheme.
Industry experts have lauded the government's proactive approach in supporting the export sector and facilitating a conducive environment for business expansion. They believe that the extended scheme will not only boost export credit availability but also contribute to job creation and economic growth in the country.
As India continues its journey towards becoming a global pharma manufacturing hub, initiatives such as the Interest Equalization Scheme play a pivotal role in enhancing the competitiveness of Indian exporters on the international stage. With the scheme now extended, exporters can look forward to sustained support from the government as they navigate the complexities of global trade.
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