Government Tightens Interest Subvention Guidelines for Export Credit

The government revised guidelines for interest subvention support on export credit. Subvention benefits will cease when a loan becomes a non-performing asset. The Directorate General of Foreign Trade clarified the scheme applies only to export credit dispensed on or after January 2.

On Friday, the government announced an amendment to the guidelines governing interest subvention support for both pre-shipment and post-shipment export credit, which falls under the Rs 25,060 crore export promotion mission.

The revised guidelines specify that interest subvention will not be applicable from the date a loan is designated as a non-performing asset (NPA), effectively stopping any subvention benefits from that point forward.

In a trade notice, the Directorate General of Foreign Trade stated that the interest subvention scheme would only apply to export credit extended on or after January 2.

(With inputs from agencies.)