Clarification regarding 2% interest subvention scheme on Rupee Export Credit – reg.
October 8, 2010
Members of the Council.
Sub: Clarification regarding 2% interest subvention scheme on Rupee Export Credit – reg.
Your kind attention is invited to the Council circular dated August 11, 2010 regarding the RBI Circular No. RBI/2010-11/165 dated August 9, 2010 on the 2% interest subvention scheme.
Vide the aforesaid Circular, the Reserve Bank of India extended the 2% interest subvention scheme on rupee export credit to the Leather and Leather Manufactures sector for a period of one year from April 1, 2010. However, in Annex – I of the RBI circular, only product namely gloves for use in industry was added under the heading Details of the additional sectors/sub-sectors eligible for interest subvention. Hence, the Council has sent a letter to the Ministry of Finance, seeking clarification that the interest subvention is applicable for the entire leather sector.
On following-up the matter with the Ministry of Finance requesting to extend the 2% interest subvention scheme to the entire leather sector, the following issues were clarified.
The 2% interest subvention scheme is already available to the SME units in the leather sector for a period of one year from April 1, 2010.
Besides SME units, the scheme has been extended to only one more product category namely Gloves for Use in Industry falling under HS Code No. 42032910 as the export of this product segment has shown a decline of about 25%.
Other than SME units and units exporting Gloves for use in Industry, the other units in leather sector cannot avail the subvention scheme.
Members may kindly note the above.
Ali Ahmed Khan
COUNCIL FOR LEATHER EXPORTS