Q. With reference to the Interest Equalisation Scheme (IES), consider the following statements:
1.It aims to promote foreign direct investment in export-oriented industries.
2.Under the scheme, imported inputs used must undergo substantial value addition in India.
3.The scheme is available only to exporters availing the Production Linked Incentive (PLI) scheme.
Which of the statement(s) given above is/are correct?
Explanation –
Statements 1 and 3 are incorrect. The Interest Equalisation Scheme is designed to provide subsidies on interest rates for pre-shipment and post-shipment export credit to eligible exporters, particularly in the Micro, Small, and Medium Enterprises (MSME) sector. Its primary goal is to make Indian exports more competitive by reducing the financing costs for exporters. The IES is available to a broad range of exporters, including those in the MSME sector and manufacturers, regardless of their participation in the Production Linked Incentive (PLI) scheme.
Statement 2 is correct. For export products to qualify under the IES, they must originate from India, which includes meeting the criteria for substantial value addition if imported inputs are used. This ensures that the exported goods are sufficiently processed or manufactured in India, adhering to the rules of origin as outlined in the Foreign Trade Policy.
Source: The Hindu
