CCEA approves 3% interest equalisation scheme & Export decline slowsdown
Export Companies in India & Tirupur get booster shot from CCEA
Cabinet committee on economic affairs approved 3 % per annum interest equalisation scheme for three years to pre and post shipment rupee export credit. This scheme of interest equalisation is effective from April 1st 2015. This initiative is being taken after hearing to the pleas from exporters in India to counter huge competition because of the overvalued rupee and low global demand.
Pre shipment Credit: The amount secured from a bank for procuring product to manufacture the exporting product.
Post shipment Credit: The amount secured from a bank the date of extending the credit after shipment of goods to the date of realization of export proceeds.
This interest equalisation for exporters in india would create financial implication of INR 2500 -2700 Crores to the Indian Government. This is the second time in the week that Indian Government is reacting to the prevent the export slow down & decline for the 11th Month in a row. Earlier, Duty Drawback Rates was raised by 2 % for engineering goods, marine products, textiles and leather products.
CCEA approval of 3 % is not applicable to merchant exporters in India.
This scheme is directly going to labour intensive Medium and small enterprises (MSME) This scheme included with 416 special tariff lines in agro processing, handloom, handicrafts, jute, paper, ceramics, medical/scientific instruments and auto components, among others.
India export decline slowsdown :
India’s export decline is slowing down. The data released for October puts exporters in india to pull away from the negativity of the slowdown. Exports decline has marginally decreased from 20.7 % in August and 24.3 % in September to 17.5% in October 2015 comparing to the 2014’s export decline stats. Pharma & drug export growth stood at 21.5% and readymade garment exports stood at 3.2% are the one of the reason for the export decline slowdown.
India export companies have achieved $154.2 billion worth of exports for the first seven months of 2015-2016. Whereas 2014-2015 total exports worth stood at $310.5 billion.so far government has been doing various steps to counter India export decline right from hiking duty refund rates for the imported product to manufacture the exporting product to approving 3% Interest equalisation scheme for pre and post shipment credit in Indian Rupees.