Namrata Kath Hazarika | 14 May, 2012
The government should extend the interest subvention scheme on rupee credit for another one year in the upcoming annual supplement to the foreign trade policy (FTP), said the Federation of Indian Exporters Organization, Director General, Ajay Sahai.
"We are of the view that the interest subvention should be extended to all export-oriented sectors. We are expecting the Commerce Ministry to move a proposal to the Finance Ministry on this," he told SME Times.
The scheme ended on March 31, 2012. Exporters from handicrafts, handloom, carpet, and small & medium enterprises (SMEs) sectors were provided the benefit under the scheme.
Sahai added, "We want an announcement should be made by the government. The interest subvention was provided to sectors such as handicrafts, handloom, leather, carpets, and SMEs. But we want now this should be given to the entire export sector. And, it should be extended for a period of one year."
FIEO said that the increase in bank interest rates for exporters from 7% to over 12% in a span of two years is a serious concern and it should be addressed in order to make Indian exporters competitive against its competitors.
Speaking to the SME Times, Confederation of Indian Textile Industry, Secretary General, D.K.Nair stressed that it is important for Indian textile and clothing industry to get the interest subvention benefit. It is the need of the hour.
"We have recommended that the entire textile and clothing sector should be given the interest subvention. The real economic problem at present is with the European and the US economy. The largest exports of textile and clothing are to these markets. They account for 60-65 percent of total Indian textile and clothing exports." he added.
"The stimulus should be given to the large exporters as well and not only to the SMEs. It should be given to the exporters who have suffered losses due to the crisis in the western markets. There is a need for some stimulus. In fact, earlier the finance minister has mentioned that some stimulus is necessary," he added.
FIEO also recommended that additional markets and new products should be included under the Focus Market Scheme (FMS) and the Market Linked Focus Product Scheme (MLFPS). All the export related schemes which are there at the moment for the benefit of the exporters should be continued.
The supplement of FTP is expected to be announced in the first week of June.
