Industrial Subsidies India: New Interest Equalization Scheme Update 2024

The Department of Commerce has issued fresh directives regarding the Interest Equalization Scheme (IES) for the current financial year. This critical industrial subsidy provides much-needed liquidity to SME manufacturers by reducing the cost of debt for export production. The scheme specifically targets labor-intensive sectors such as textiles, leather, and handicrafts, offering a subvention on credit rates. Recent updates from the Reserve Bank of India (RBI) and DGFT indicate a revised cap on the total subvention an individual exporter can claim per year. This move ensures that the budgetary allocation is distributed more equitably across a larger number of MSME units. As per the latest Trade Notices, exporters must now provide Udyam Registration details to avail of the 3% (for MSMEs) and 2% (for specific HSN codes) interest subvention. ## Key points for manufacturers - **Subvention Rates:** 3% for MSME manufacturer-exporters and 2% for merchant exporters in 410 identified HSN categories. - **Mandatory Registration:** Valid Udyam Registration and an active IEC are prerequisites. - **Cap Limits:** Be aware of the annual individual exporter cap to plan your finance costs accurately throughout 2024. This subsidy remains a cornerstone for Indian competitiveness in the global market, effectively lowering the cost of capital for the manufacturing sector.