EEPC has asked RBI for carving out an exporter-friendly interest rate structure for exporters.
Kolkata: EEPC India, the apex body of the engineering exporters, is lobbying hard with the Reserve Bank of India (RBI) to extend the interest equalisation scheme (IES) for exporters to the entire MSME sector, so that the linkage with exports goes away and comply with the WTO norms. The apex bank should facilitate easy and less expensive bank loans, especially for MSME exporters, to help them stay competitive in the wake of the US-China trade tensions, a top official of the EEPC India said.
At present, the IES scheme is for 'rupee export credit' with two variants: a 5 per cent interest equalisation for MSME rupee export credit; and a 3 per cent interest equalisation for 416 tariff lines and merchant exporters who export items falling under these specific tariff lines. However, as the IES is export-specific and WTO non-compliant, it should accordingly be re-aligned.
"We are in the midst of a very anxious global economic environment, marked by ever-rising US-China trade tensions and instability in the crude oil prices, which tend to leave forex markets highly volatile. In this trading landscape, the Indian exporters, particularly the small enterprises in the engineering sector, are facing severe cost and other challenges. We have made a comprehensive presentation to the RBI for carving out an exporter-friendly interest rate structure and expect the central bank to advise banks accordingly and notify the changes, where required," said Ravi Sehgal, Chairman, EEPC India.
In its presentation to the RBI, the EEPC India also suggested that the banks should not ask for external credit rating as they are doing internal rating and banks be advised not to charge loan application processing and credit limit renewal fee, he said.