Exporters Urge Extension of IES Beyond MSMEs

Exporters, through the Federation of Indian Export Organisations (FIEO), have called on Union Commerce and Industry Minister Piyush Goyal to extend the Interest Equalisation Scheme (IES) to include all beneficiaries. They argue the current two-month extension, limited to MSMEs, is insufficient and could harm labor-intensive exports.

The Federation of Indian Export Organisations (FIEO) has appealed to Union Commerce and Industry Minister Piyush Goyal, expressing discontent over the limited two-month extension of the Interest Equalisation Scheme (IES), which is restricted solely to MSMEs.

FIEO president Ashwani Kumar emphasized that the scheme has significantly aided not only MSMEs but also merchant exporters and large manufacturers, with a reduced rate of two per cent for 410 tariff lines that include labour-intensive products.

The current scheme, set to expire in June, provides pre and post-shipment rupee export credit, offering a two per cent interest equalisation rate for manufacturers and merchant exporters of stipulated 410 export items, and a higher rate of three per cent for MSME manufacturers exporting under these items.

Kumar warned that excluding these categories in the extended scheme will severely affect labor-intensive exports already facing numerous challenges.

He urged Minister Goyal to restore the comprehensive benefits of the scheme, citing various hurdles that the export sector is currently grappling with, such as increased freight rates, longer voyage times, and rising interest rates.

Kumar cautioned that withdrawing IES benefits would weaken the competitive edge of exporters and stifle growth momentum.

Countering FIEO's plea, the Directorate General of Foreign Trade (DGFT) has limited the scheme's benefits to MSMEs and capped the total outlay at Rs 750 crore.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)