Engineering export promotions body EEPC India on Monday said that it has urged the central government to restore interest subvention to 3 per cent for 410 specified tariff lines and raise the rate to 5 per cent for MSME (micro, small and medium enterprise) exporters under any tariff lines.

“Considering the rise in repo rate from 4.4 per cent to 6.5 per cent, we have requested to restore interest subvention rate to 3 per cent for the specified 410 tariff lines. We also requested that for MSME manufacturers exporting under any tariff line, the interest subvention rate be increased to 5 per cent,” said EEPC India chairman Arun Kumar Garodia.

“Merchant exporters have low-profit margins, and the cost of credit affects their viability significantly. Therefore, we have requested to extend the Interest Equalisation Scheme to merchant exporters at 3 per cent subvention rate,” he added.

On December 8, 2023, the Union cabinet had approved an additional allocation of ₹2,500 crore for the continuation of Interest Equalisation Scheme till June 30, 2024.

Under the scheme, which provides pre- and post-shipment export credit to traders, rate of interest equalisation was 2 per cent for the listed 410 tariff lines and 3 per cent for MSME exporters of all tariff lines.

As part of their budget submission, EEPC India has also proposed that a weighted deduction of 150 per cent in respect of expenditure incurred on research and development should also be reinstated.

A 100 per cent depreciation for investment in solar power generation for MSME units, a 25 per cent tax slab for MSME units that are partnership, LLP, sole proprietor with a condition of plough back of the extra 10 per cent in the business, are among the
other submissions.