Under the scheme, banks provide loans to exporters at a lower interest rate, and the lenders are compensated by the government | Photo: Shutterstock.com
Ahead of the Union Budget 2024-25, trade and industry bodies on Tuesday urged finance minister Nirmala Sitharaman to provide tax deductions and investments to boost research and development, simplify the transfer pricing regime, and adjust customs duties on certain products.
During the pre-budget meeting with the finance minister and top officials from the finance ministry in the North Block, exporters called for the continuation of the export-boosting scheme—interest equalisation, higher budgetary allocation for the Market Access Initiative scheme, and the removal of equalisation for rough diamonds.
“The interest equalisation scheme is helping exports a lot. We request the scheme, which is valid till June 30, 2024, be extended for a period of five years. Considering the rise in interest rates consequent to the increase in the repo rate from 4.4 per cent to 6.5 per cent in the last two years, the subvention rates may be restored from 3 per cent to 5 per cent for manufacturers in micro, small, and medium enterprises (MSMEs) and from 2 per cent to 3 per cent for all in respect of 410 tariff lines,” Federation of Indian Export Organisations (FIEO) said.
Under the scheme, banks provide loans to exporters at a lower interest rate, and the lenders are compensated by the government. The interest equalisation scheme was launched close to a decade ago to reduce stress among exporters, especially in labour-intensive sectors as well as MSMEs.
Trade association of the IT industry—NASSCOM—has called for greater investment in research and development, intellectual property (IP), and simplification of the transfer pricing regime.
The Gem and Jewellery Export Promotion Council called for duty drawback on exports of jewellery, ‘safe harbour’ rules in special notified zones, and the abolition of equalisation levy for rough diamonds to boost the sector’s exports, which saw a 30 per cent year-on-year contraction in FY24.
The meeting was attended by trade and industry bodies including Wipro Ltd, heads of state Chambers of Commerce from Tamil Nadu, Kolkata, Gujarat, NASSCOM, Federation of Hotel and Restaurant Association of India, National Restaurant Association, export promotion councils such as FIEO, and Gem and Jewellery Export Promotion Council, among others.
First Published: Jun 25 2024 | 3:01 PM IST
