The government may extend the interest equalisation scheme for exporters till the end of the current fiscal as the coronavirus pandemic has impacted shipments.

Discussions are on with the finance ministry to extend the scheme till the end of the current fiscal, in line with the foreign trade policy.

Renewal and increase in the rates of the interest equalisation scheme is being worked out and will come up with a solution to this very soon, a senior commerce ministry official said.

If the interest equalisation scheme, which provides credit at a lower interest rate, is not extended, exporters may be hugely impacted. Already they are losing orders with production coming to a stop because of the national lock-down but their shipments and payments are also stuck, officials said.

Under the scheme, which was was announced in April 2015 for five years, exporters get 3-5 per cent subsidy on loans for specified items. The scheme has already expired on March 31 and exporters are demanding extension of the plan.

While the Foreign Trade Policy, which was to lapse on March 31, 2020, was extended by one year, so far no decision has been taken on the interest equalisation scheme.

The interest equalisation scheme, earlier called interest subvention scheme, covered 416 selected tariff lines, many of them involving labour-intensive production.