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.