Exporters have sought the central government's intervention in providing affordable and easy credit availability to MSMEs amid global headwinds due to a lack of liquidity.
The apex exporters' body Federation of Indian Export Organisations, in a letter to Finance Minister Nirmala Sitharaman, requested for the extension of Emergency Credit Linked Guarantee Scheme (ECLGS) till March 31, 2024 and restoration of interest subsidy benefit of 5 per cent to manufacturer MSMEs.
It said some of the MSME sectors are affected due to a dip in exports on account of a global demand slowdown.
FIEO has urged extending the ECLGS 'till March 31, 2024' as it will help micro, small and medium enterprises sail through this difficult time and bounce back when the situation improves.
"With interest rates firming up, MSMEs are getting credit at not less than 8-11%. The subvention for the interest equalisation scheme was reduced as interest rates were coming down. However with complete change in situation, there is an urgent need to restore interest equalisation benefit of 5 per cent," it added.
MSMEs account for about 40% in the country's total exports.
India's exports declined 6.86% to $34.48 billion in August, for the seventh month in a row, due to a fall in shipments from key sectors like petroleum and gems and jewellery on subdued global demand.
The trade deficit (difference between imports and exports) during the month touched a 10-month high of $24.16 billion.
Cumulatively, exports during April-August this fiscal contracted 11.9% to $172.95 billion. India's exports contracted 15.88% in July.
Exports sectors, which recorded negative growth in August, include tea, coffee, rice, spices, leather, gems and jewellery, textiles, and petroleum products.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
