Interest Equalization Scheme (IES) on Pre and Post Shipment Rupee Export Credit
Government of India has allowed for extension of the Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit (‘Scheme’) up to June 30, 2024. The rate of interest equalization shall be 2% for Manufacturers and Merchant Exporters exporting under specified 410 HS lines and 3% to the MSME manufacturers exporting under any HS line.
Cap on subvention amount: The annual net subvention amount has been capped at Rs 10 Cr per Importer-Exporter Code (IEC) in a given financial year, and all disbursement from April 1, 2023 shall be reckoned for this purpose.
IES from July to August: Government of India, vide Trade Notice No.07/2024-2025 dated June 28, 2024 has allowed for an extension of the Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit (‘Scheme’) up to August 31, 2024 i.e. from July 1, 2024 to August 31, 2024.
Further, Government has advised the following modifications to the scheme:
- Eligibility of borrowers: With effect from July 1, 2024, only MSME Manufacturer exporters would be eligible under the Scheme. Hence, the Scheme benefits will not be available to non-MSME exporters, and such claims are not to be entertained beyond June 30, 2024.
- Cap on subvention amount: The interest equalization will be capped at ₹1.66 Crore per Importer-Exporter Code (IEC) for the aforesaid extended period of the scheme.
IES for September 2024: Government of India (Gol), vide Trade Notice No.16/2024-2025 dated August 31, 2024, has allowed for an extension of the Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit (‘Scheme’) from September 1, 2024, to September 30, 2024.
Further, the Government has advised the following modifications/clarifications to the Scheme:
a) The aforesaid extension is applicable only for MSME Manufacturer exporters.
b) The annual net subvention amount is capped at ₹10 Crore per Importer-Exporter Code (IEC) for a given financial year, accordingly a cap of ₹5 Crore per IEC for MSME Manufacturer exporters is imposed till September 30, 2024, for the financial year starting from April 1, 2024.
c) It is further advised that for Manufacturer Exporters and Merchant Exporters under the non-MSME category, the cap shall be ₹2.5 Crore per IEC till June 30, 2024, as per the Government’s Trade Notice No.17/2024-2025 dated September 17, 2024.
