Government announces relief on rupee export credit interest rates to nine sectors

In the recent months, the Indian Rupee has appreciated vis-a-vis the US Dollar. Exporters of goods and services from India have brought to the notice of the Government the difficulties they face as a result of rupee appreciation. The matter has been considered by the Government and it has been decided to provide relief to the exporters in the following sectors

It has been decided to provide interest subvention of 2 percentage points p.a. to all scheduled commercial banks in respect of rupee export credit to the specified categories of exporters. The interest subvention of 2 percentage points p.a. would be available to the following categories of exporters:

(i) Textiles (including Handlooms)
(ii) Readymade Garments
(iii) Leather Products
(iv) Handicrafts
(v) Engineering Products
(vi) Processed Agricultural Products
(vii) Marine Products
(viii) Sports Goods
(ix)Toys

As per the existing guidelines, banks charge interest rate not exceeding BPLR minus 2.5% on rupee pre-shipment credit upto 180 days and rupee post-shipment credit upto 90 days. Banks will now charge interest rate not exceeding BPLR minus 4.5% on pre-shipment credit upto 180 days and post-shipment credit upto 90 days on the outstanding amount for the period April 1, 2007 to December 31, 2007 to the above mentioned sectors.

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