High Interest Rates Taking Toll On MSME Exporters

The Commerce Department has been struggling to convince Finance Ministry regarding relevance of Interest Equalisation Scheme and the extent to which it is maintaining manufactur-ing competitiveness - Santosh Kumar Sarangi, DGFT

New Delhi: The country’s high interest rates are a big deterrent for exporters community and the Commerce Ministry is working with its finance counterpart to help them at this front, a senior government official said on Wednesday.

Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi said that the department of commerce has been ‘struggling’ to convince the Finance Ministry regarding the relevance of the Interest Equalisation Scheme (IES) and the extent to which it is maintaining manufacturing com-petitiveness. Sarangi said there are many studies which suggest that very high collateral demand by financial institutions is a big deterrent for MSMEs to access institutional finance and that de-ters them from getting into the export market.