A body representing exporters, the Federation of Indian Export Organisations (FIEO), has raised concerns regarding the recent extension of the Interest Equalisation Scheme (IES). Addressing Union Commerce and Industry Minister Piyush Goyal, FIEO President Ashwani Kumar emphasized the scheme’s critical role in supporting not just MSMEs but also merchant exporters and large manufacturing companies. The current extension, limited to two months and exclusive to MSMEs, has sparked apprehensions about its impact on various sectors, particularly those involved in labour-intensive exports.
BulletsIn
- FIEO urges Piyush Goyal to restore IES benefits for all exporters.
- The scheme offers a two percent interest equalisation rate for manufacturers and merchant exporters across 410 tariff lines.
- It provides a higher rate of three percent for MSME manufacturers exporting under the specified tariff lines.
- Exclusion of merchant exporters and large manufacturers could severely affect labour-intensive export sectors.
- Concerns raised include increased freight rates and longer voyage times impacting export competitiveness.
- FIEO warns that withdrawal of IES benefits may dampen exporters’ competitive edge.
- Directorate General of Foreign Trade (DGFT) restricted benefits to MSMEs and capped scheme outlay at Rs 750 crore.
- FIEO highlights challenges faced by exporters amidst rising interest rates.
- Kumar stresses the need to maintain competitive export growth momentum.
- The letter calls for intervention to restore previous IES benefits to sustain export sector growth.
