Home / Knowledge / News / Textiles / Indian exporters seek extension of interest subvention

Indian exporters seek extension of interest subvention

May '12
In view of the increasing costs of credits for the export sector, the Indian Government allowed a two percent interest subvention, i.e. a two percent subsidy to all exporters of the MSME segment and certain labor intensive sectors like handicrafts, handlooms and carpets. However, this scheme ended on March 31, 2012.

Now, the exporters are seeking extension of the scheme in view of the high interest rates currently prevailing in the country.

“We have made a plea to the Commerce Minister to decide on the extension of the interest subvention scheme in the upcoming Foreign Trade Policy (FTP) review. It is only after the Commerce Ministry's approval that the grant will be at the disposal of the RBI, which will use the fund for refinancing different banks that are providing 2 percent export credit to the exporters,” Mr. Ajay Sahai, Director General of Federation of Indian Exporters Organizations (FIEO) told fibre2fashion.

Mr. Sahai hopes the demand would be accepted because the cost of credit in the last one and a half year for the exports sector has moved upwards from 7 percent to around 11.5-12 percent, which is a very steep increase and has made exports uncompetitive.

“At least two percent interest subvention should be provided by the Government to exporters. It would not provide them the equal benchmark rates of interest with competing Southeast Asian countries, where the rate of interest for exports is around six percent. But, it would bring down the minimum export credit rate in the range of 9-10 percent, thus giving some respite to the exporters,” says Mr. Sahai.

Briefing about other demands of the exporters, he says, “We are also demanding that there should be some stability in the exchange rate. The buyer is also aware that the rupee which was 45 to a dollar earlier has moved to 54. So, instead of putting the price of a product which was earlier USD 1, he is asking the exporter to reduce it to 90 cents, which is a cause of concern.”

“So, we would like the value of the rupee to remain in the limited band of +\- 5 percent. Rupee depreciation of 10-15 percent will interest only a speculator and not an exporter,” he avers.

Fibre2fashion News Desk - India

Must ReadView All

Pic: Ritu Manoj Jethani / Shutterstock.com

Apparel/Garments | On 31st Jul 2021

US firm Steve Madden moves production to Mexico & Brazil from China

As supply chain disruption remains a significant challenge, American...


Apparel/Garments | On 31st Jul 2021

Apparel & footwear firm GBG USA files for bankruptcy protection

GBG USA, an indirect wholly owned subsidiary of Global Brands Group...

Pic: Shutterstock

Apparel/Garments | On 31st Jul 2021

Asian garment industry market concentration, consolidation rise: ILO

Although Asia's garment market rose in size in value terms before the ...

Interviews View All

Vandana Narang, National Institute of Fashion Technology

Vandana Narang
National Institute of Fashion Technology

Campus placements are low due to lockdowns

Textile Industry, Head honchos

Textile Industry
Head honchos

Great step towards realising end goal of 'AtmaNirbhar Bharat'

Textile Industry, Head honchos

Textile Industry
Head honchos

Fabric selection & recommendation based on client's brief

Nantas Montonati,

Nantas Montonati

The Riri Group is a one-stop supplier of metal accessories for the luxury...

Shivaani Jain,

Shivaani Jain

Established in 2015, Once Upon A Trunk is a one-stop-shop with almost...

Richard Armitage,

Richard Armitage

Adaptive Control automates, controls and monitors machines, systems and...

Sven Ghyselinck, Devan Chemical

Sven Ghyselinck
Devan Chemical

Headquartered in Belgium and with offices in the United Kingdom, Portugal...

Suresh Patel, Non Woven Federation of India

Suresh Patel
Non Woven Federation of India

The Non Woven Federation of India (NWFI), representing the regional...

Keith McMillen, Bebop Sensors

Keith McMillen
Bebop Sensors

Bebop Sensors' smart fabrics allows for a new level of interaction between ...

Anjali Bhaskar, Samatvam

Anjali Bhaskar

Samatvam, a womenswear brand that blends age-old craftsmanship with modern ...

Seema Gujral, Label Seema Gujral

Seema Gujral
Label Seema Gujral

<b>Seema Gujral</b>'s designs for her eponymous label revolve around...

Sarah Denise Cordery, Sarah Denise Studio

Sarah Denise Cordery
Sarah Denise Studio

Manchester, England-based Sarah Denise Studio provides relevant fashion...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


Leave your Comments

July 2021

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

Advanced Search