Interest subsidy scheme for exports in next 2 months: Rajeev Kher

MUMBAI: The government is likely to announce an extension of the interest subsidy scheme for exporters in the next two months, a senior government official said today.

Commerce Secretary Rajeev Kher also said that India and the European Union are expected to resume the negotiations for a free trade agreement soon.

"After a long period, we are now receiving communication from the EU for talks on FTA. The ministerial level discussion will start shortly," he said.

On interest subsidy scheme, he said, "Finance ministry has given us the sanction for extending the interest subvention scheme for exports for the next three years. We are working out the details and hope to be ready with it in the next two months. We are still finalising some sectors to be included in the scheme".

He was speaking to reporters on the sidelines of a Federation of Indian Exports Organisation (FIEO) meeting here.

However, he said unless the expenditure finance committee of the finance ministry clears the proposal, the commerce ministry can't notify the interest subvention scheme. That is the process which is taking a little longer.

Under the scheme, labour-intensive sectors of exports will get access to subsidised credit, he added.

Loans at subsidised rates would help exporters to boost shipments as the country's exports registered a six-year low growth rate in March. Besides global slowdown, high interest rates too are impacting the exporters.

The scheme ended on March 31, last year. FIEO is demanding to extend it retrospectively from April 2014 but government is expected to implement it from April this year.

Kher said the government is worried over the downward trend of the exports.

He admitted that the export growth depend largely on the rupee level, which currently looks challenging. The volatility may cause problems for exports, he added.

"However, we hope global economy will improve and we will be able to achieve USD 900 billion exports by 2020," he said.

On the progress of various FTA talks, Kher said the government is keen to finalise seven-eight FTAs with various countries, including the EU, Russia, Peru and Canada.

In May 2013, India and the EU failed to bridge substantial gaps on crucial issues, including data security status for IT sector.

Launched in June 2007, the negotiations for the proposed broad-based Trade and Investment Agreement (BTIA) between India and the 27-nation European bloc witnessed many hurdles with both sides having major differences on crucial issues.

Kher also said the government has no plans to relook at import norms for gold, despite the sharp jump in gold imports in recent months.