The government is unlikely to consider the immediate inclusion of items kept out of the interest subvention scheme for exporters – such as certain steel, pharmaceuticals and chemical products – despite industry demand, sources said.
“The scheme will roll out as announced. The idea is to give support to MSME exporters and a positive list of sectors covered under the scheme are ones with high MSME participation. The list could be expanded later, but not right now,” a person tracking the matter told businessline.
As part of the ₹25,060-crore six-year export promotion mission (EPM), the government announced the interest subvention scheme earlier this month to make credit available to MSMEs at a competitive rate. The scheme has a corpus of ₹5,181 crore.
Under the scheme, a base interest subvention (subsidy) of 2.75 percent, on pre- and post-shipment rupee export credit extended by eligible lending institutions, is to be provided to MSME exporters of goods of all eligible tariff lines.
However, unlike the earlier Interest Equalisation Scheme which covered most MSME exports (it lapsed on December 31 2024), the positive list under the new interest subvention scheme covers 75 per cent of total tariff lines. The subvention limit has been fixed at ₹50 lakh per exporting firm annually.
Exporters’ woes
The list excludes restricted and prohibited items, waste and scrap, PLI-covered products, and products already excluded under RoDTEP (Remission of Duties and Taxes on Exported Products) and RoSCTL schemes. These include certain steel, pharmaceutical and chemical products.
Exporters of engineering goods are disappointed as several steel items have been excluded. “Chapter 72 (of HS code classification containing iron and steel products) has been completely left out despite having a major contribution from MSME exporters. Hope that the government will consider this chapter in their future revisions,” according to Chairman, EEPC India.
Chemical exporters, too, have made a case for their products to be fully covered under the positive list to avail maximum benefit from the scheme.
“The government has made the positive list using a methodology that prioritised sectors with high MSME participation, including labour-intensive and capital-intensive industries. We will wait and see how it pans out. A decision on expansion of the list can be taken later,” the source said.
The scheme is also limited by the outlay fixed for it. If the fund situation is comfortable, the possibility of adding sectors could be greater, an industry source said.
