The Reserve Bank on Tuesday announced 2 per cent interest subsidy on Rupee export credit to the labour-oriented and small scale sectors to cushion them from slowdown in the major markets like the U.S. and Europe.
Exporters of handicrafts, handlooms and carpets will be eligible for the interest subvention to be available up to March 31, 2012, the RBI said.
The exporters in the small and medium enterprises across all the sectors would also be entitled for cheaper bank credit, subject to a minimum interest rate of 7 per cent.
In a direction to the banks, the RBI said that the government has decided to extend the scheme from April 2011 to March 2012, for the four category of exporters.
“Banks may ensure to pass on the benefit completely to the eligible exporters,” it said.
The decision to help exporters was announced on a day when the high-level Board of Trade reviewed the situation arising out of renewed worries about the US economy and the debt crisis in Europe.
The BoT, headed by Commerce and Industry Minister Anand Sharma and comprising well-known industrialists, discussed issues like currency volatility, availability of dollar credit and high cost of credit.
Although India’s exports grew by 54 per cent in April-August period, the time ahead is viewed as full of challenges.
“I am apprehensive about the roll-out of next seven months. I hope we should be able to achieve $ 280 billion exports this fiscal,” Minister of State for Commerce and Industry Jyotiraditya Scindia said.
Exporters’ body FIEO welcomed the interest subsidy but wanted more. “We were expecting 3 per cent and also for sectors like textile, gems and jewellery and engineering,” it said in a statement.