The Commerce Ministry has asked its finance counterpart to enhance the rate of subsidy from 3 per cent to 5 per cent on credit provided to exporters, a senior official said on Thursday.
Directorate General of Foreign Trade (DGFT) Alok Vardhan Chaturvedi said that in the Union Budget 2018-19, the Government has increased allocations for interest equalisation scheme to Rs 2,500 crore from Rs 1,000 crore earlier.
Under this scheme, the Government provides 3 per cent interest subsidy to all MSME and labour intensive export sectors.
“The Commerce Minister Surseh Prabhu has taken up with the Finance Minister for increasing this interest subvention rate from 3 per cent to 5 per cent,” Chaturvedi said. He said that the cost of capital in India is much higher as compared to other countries.