The Ministry of Commerce in India is looking to recommend a five-year renewal of a program that helps exporters. This program, known as the interest equalisation scheme, has been well-received by exporters and aims to boost overseas shipments.

Government officials told a news channel that the extension would apply to both short-term and long-term loans for exports in Indian rupees. They also mentioned that the program’s effectiveness is being assessed, and the final decision will depend on the outcome of this evaluation. The current program is set to expire at the end of June 2024.

Since its launch in April 2023, a significant portion of the allocated funds have already been used. This highlights the program’s importance, especially considering the current global economic climate. In order to bridge the gap until June 2024, the government provided additional funding in December 2023.

Initially introduced in 2015, the program has been extended multiple times with additional funding. The scheme offers exporters interest rate reductions on loans for exports in rupees. This benefit is especially helpful for small and medium-sized businesses (MSMEs) in the manufacturing sector.

The program covers specific sectors like leather, textiles, and garments. It’s important to note that the program has a spending limit and a maximum annual benefit per exporter. Additionally, there are eligibility requirements for banks participating in the scheme.

This program is overseen by two government bodies along with the Reserve Bank of India, which is responsible for its implementation through authorized banks.