India extends interest rate relief until 2014 | SupportBiz

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India extends interest rate relief until 2014

The government Wednesday extended the interest subsidy for some labor-intensive industries such as handicrafts, textiles and ready-made garments till March, 2014, in a bid to boost their sluggish exports. Engineering goods were added to the two percent interest subvention scheme.

"The interest subvention scheme which was announced on June 5 is being extended till March 31, 2014, to provide to aide to the sectors which came under its purview. Engineering goods and its sub-sectors will also be provided the benefit of the scheme from Jan 1, 2013 till March 31, 2014," Commerce and Industries Minister Anand Sharma said at a news conference here.

According to Sharma, the decision to extend the interest subvention scheme was taken after the country's exports fell 5.95 percent between April and November this fiscal at $189 billion when compared to the like period of 2011-12.

During the period, the country's import declined marginally to $318.7 billion from an year ago period when imports had touched $324 billion. 

"There is a great trade deficit of 129.5 billion (April-November). For the calender year period between January-November, the trade deficit stands at 175.5 billion. We imported close to $444 billion while the exports were at $268 billion," Sharma said.

"This (deficite) is a matter of serious concern. Keeping this in view, we are extending the interest subvention scheme for export-based labour intensive sectors like SME and textile sectors till March 31, 2014."

Sharma blamed the global slowdown and Euro zone crises for the sluggish exports. He also pointed out that the government's policy of diversification to other markets such as Africa, southeast Asia and South America has paid rich dividends. 

"We have a two-way trade of $65 billion with Africa, $80 billion with Association of Southeast Asian Nations (ASEAN) and $30 billion with South America. We also continue to maintain our presence in the developed markets of US and Europe," Sharma said.

The country has achieved market growth in exporting processed agriculture commodities, said Sharma. It exported $6 billion worth of rice, $4.3 billion of cotton and $1.8 billion of sugar.

While there was a marked decline in exports of engineering goods which fell 6.59 percent, tool, leather products declined by four percent, carpets by 11 percent, jute products by 14 percent, ready made garments by 8 percent and handicrafts by 65 percents.