India’s exports fell by 17.53 per cent in October in the past 10 months. In view of this a three per cent interest subsidy scheme has been announced for the benefit of Indian exporters to make the export sector globally competitive.

The fall in exports has been due to a demand slowdown, although trade deficit showed some improvement due to higher import contraction. The scheme would be available to all exports of micro, small and medium enterprises and 416 tariff lines, but not to merchant exporters. Under the scheme, exporters get loans at affordable rates which help them ship more goods abroad. The scheme will run for five years and have an annual financial implication of up to Rs 2,700 crores. The rate of interest equalisation would be three per cent, which would be evaluated after three years.

An earlier interest subsidy scheme for exporters had ended on March 31, 2014. Under the Merchandise Exports from India Scheme, the government provides exporters duty credit scrip at two per cent, three per cent and five per cent of their export turnover, depending upon the product and the country, as envisaged in the foreign trade policy 2015-20.