The Interest Equalisation Scheme (IES) is a financial support initiative by the Government of India designed to provide subsidized interest rates on pre- and post-shipment export credit to eligible exporters.
✅ Objective: Reduce the cost of credit for exporters, making Indian goods competitive in global markets.
✅ Interest Benefit: 2% to 3% interest rate subvention on export credit.
✅ Eligible Exporters: MSMEs, manufacturer exporters, and specific sector-based exporters.
✅ Ideal For: Businesses facing high interest costs on working capital and export financing.
✅ Interest Subvention: Reduction of 2% to 3% on interest rates for eligible exporters.
✅ Applicable on Export Credit: Covers both pre-shipment and post-shipment credit in Indian Rupees.
✅ MSME & Manufacturer Exporter Support: MSMEs and specified sectors get preferential benefits.
✅ Covers All Export-Oriented Sectors: Includes most manufacturing & service export sectors.
✅ Operational Through Banks: Available through all scheduled commercial banks and EXIM Bank.
✔ MSME Exporters – Small and medium exporters benefit from higher subvention (3%).
✔ Manufacturer Exporters – Those exporting under specific HSN categories.
✔ All Sectors (Except Excluded Categories) – Businesses exporting eligible goods & services.
⚠️ Not Eligible:
❌ Merchant exporters (only manufacturers qualify).
❌ SEZ, EOU, and Units in FTWZ.
❌ Sectors outside the notified list.
Major Benefits of the Interest Equalisation Scheme
✅ 1. Lower Borrowing Costs for Exporters
Exporters can avail export credit at a reduced interest rate, making international trade more profitable.
✅ 2. Enhanced Competitiveness
Lower capital costs help Indian exporters compete with China, Vietnam, and Bangladesh in global markets.
✅ 3. Improved Cash Flow & Liquidity
Access to cheaper export finance improves working capital management.
✅ 4. Covers Both Pre & Post Shipment Credit
🔹 Pre-Shipment Credit: For procuring raw materials, manufacturing, and processing.
🔹 Post-Shipment Credit: For financing invoices after shipment.
✅ 5. Government Backed Stability
The scheme is backed by RBI & DGFT, ensuring stability and transparency.
🔹 Engineering Goods
🔹 Textiles & Garments
🔹 Pharmaceuticals
🔹 Handicrafts & Leather
🔹 Automobile Components
🔹 Processed Food & Agri Products
🔹 Chemicals & Petrochemicals
📌 Note: The government notifies a list of eligible HSN codes from time to time.
Challenges & Solutions in IES Implementation
1. Delays in Processing Subsidy
🔹Problem: Some banks delay passing benefits to exporters.
🔹Solution: We assist in ensuring timely claim processing.
2. Confusion About Eligibility
🔹Problem: Unclear product coverage.
🔹Solution: We provide detailed eligibility assessment before application.
3. Documentation Errors
🔹Problem: Incorrect filing can result in rejection or delays.
🔹Solution: Our experts ensure error-free submissions.
Interest Equalisation Rates Under the Scheme
| Category | Interest Subvention Rate |
|---|---|
| MSME Exporters | 3% |
| Manufacturer Exporters (All Sectors) | 2% |
| Merchant Exporters | ❌ Not Eligible |
📌 Note: Interest subvention is applied on Rupee Export Credit only.
Why Choose Pragati Exim Solution for IES Services?
📌 25+ years of experience in Export-Import consultancy
📌 Expert guidance on eligibility & documentation
📌 Direct coordination with banks for hassle-free claims
📌 End-to-end support in securing interest subvention
📞 Want to reduce your export credit cost? Contact Pragati Exim Solution today! 🚀
- 01 What is the main purpose of the Interest Equalisation Scheme?
- To provide interest subvention (2% to 3%) on export credit to reduce borrowing costs.
- 02 Who is eligible for the scheme?
- MSME exporters, manufacturer exporters, and businesses exporting goods under eligible HSN codes.
- 03 How does the scheme benefit exporters?
- By reducing interest rates on export credit, making financing more affordable.
- 04 Can merchant exporters avail the scheme?
- No, only manufacturer exporters & MSMEs are eligible.
- 05 Does the scheme cover post-shipment credit?
- Yes, both pre-shipment and post-shipment credit are covered.
- 06 Which banks offer Interest Equalisation?
- All Scheduled Commercial Banks (SCBs) and EXIM Bank.
- 07 Is there a cap on the loan amount?
- No specific cap, but subvention applies only to export credit sanctioned by banks.
- 08 Does the scheme apply to foreign currency loans?
- No, IES applies only to Rupee Export Credit.
- 09 How can exporters claim the benefit?
- Banks automatically apply the subvention on eligible export finance.
- 10 10. What is the validity of the scheme?
- The scheme has been extended till March 2024, subject to further review.
- 11 Can SEZ, EOU, or FTWZ units apply for IES?
- No, units in SEZ, EOU, FTWZ are not eligible.
- 12 What documents are required to claim IES benefits?
- ✔ IEC Certificate ✔ Export Credit Sanction Letter ✔ Bill of Entry / Shipping Bill ✔ MSME Registration (if applicable)
- 13 Can service exporters avail IES?
- No, IES only applies to physical goods exports, not services.
- 14 Is there any limit on the number of times IES can be claimed?
- No, exporters can avail benefits for every eligible export transaction.
- 15 How can Pragati Exim Solution assist in IES claims?
- We provide expert advisory, documentation support, and bank coordination to ensure exporters receive maximum benefits under IES.
| Category | Interest Subvention Rate |
|---|---|
| MSME Exporters | 3% |
| Manufacturer Exporters (All Sectors) | 2% |
| Merchant Exporters | ❌ Not Eligible |
The Interest Equalization Scheme (IES) is a government initiative that helps exporters by providing a subsidy on export credit interest rates. This scheme is designed to reduce the cost of financing pre- and post-shipment credit for exporters, making Indian products more competitive in the global market. At Pragati Exim Solution, we provide expert assistance to help businesses avail themselves of the benefits under this scheme. We ensure seamless coordination with banks, assist with documentation, and ensure full compliance with DGFT and RBI regulations.
- 1. What is the Interest Equalization Scheme (IES)?
-
- 2.How long is the interest subsidy available under IES?
-
Serenity Is Multi-Faceted Blockchain Based Ecosystem, Energy Retailer For The People, Focusing On The Promotion Of Sustainable Living, Renewable Energy Production And Smart Energy Grid Utility Services.
- 3.Are there any specific documentation requirements to avail of IES?
-
Serenity Is Multi-Faceted Blockchain Based Ecosystem, Energy Retailer For The People, Focusing On The Promotion Of Sustainable Living, Renewable Energy Production And Smart Energy Grid Utility Services.
- 4.Is the Interest Equalization Scheme applicable to all types of exports?
-
Serenity Is Multi-Faceted Blockchain Based Ecosystem, Energy Retailer For The People, Focusing On The Promotion Of Sustainable Living, Renewable Energy Production And Smart Energy Grid Utility Services.