The extension shall take effect from April 01, 2020 and end on March 31, 2021 covering a period of one year, according to the RBI circular.

“We welcome the RBI’s announcement in this hour of crisis. It will help the apparel exporters gain access to cheaper loans,” AEPC chairman A Sakthivel said in a press release.

“With the current uncertainty of rupee exchange rate vis-à-vis other currencies, taking rupee loan on packing credit lowers down our interest burden and removes the need for taking a risk on foreign cover,” Sakthivel said, adding that the Council had been demanding extension of the scheme to sail through the Covid-19 pandemic.

In November 2018, the interest subsidy was increased to 5 per cent from 3 per cent with an aim to boost MSME sector exports. Later, the government included other merchant exporters too under the scheme and allowed them interest equalisation at the rate of 3 per cent on credit for export of certain products.

“We wholeheartedly thank our Union minister of textiles, minister of commerce and industry, minister of finance and specially the RBI Governor. This will help us a lot during this crisis,” Sakthivel added.

Fibre2Fashion News Desk (RKS)