GLOBAL SELLING BLOG

All you need to know about Interest Equalisation Scheme and its benefits

The Interest Equalisation Scheme was launched to support Indian exporters with shipment credit. In this blog, learn more about its coverage, process, and eligibility criteria.

To further accelerate exports and assist businesses in global expansion, the Government of India launched many schemes and incentives. One such scheme is Interest Equalisation, which was designed to provide export credit to exporters.

What is the Interest Equalisation Scheme?

The Government of India introduced the Interest Equalisation Scheme (IES) in April, 2015 to support Indian exporters with shipment credit. Although the scheme was introduced for five years when launched, it was later extended to March, 2024, owing to the challenges due to the COVID-19 pandemic¹.

Coverage under the Interest Equalisation Scheme

The scheme initially covered a 3% interest equalization rate, which was later revised to 5% in November, 2018. However, the rate was kept at 3% for large manufacturers and merchant exporters. The scheme covered labor-intensive sectors that accelerated the potential for employment generation in the country. The key sectors covered under the scheme include coir and coir products, toys and sports items, readymade garments and fabrics, glass and glassware, handicrafts and handloom products, ceramic products and cosmetics, processed agricultural and food items and toiletries, among others.

Unique identification number for Interest Equalisation Scheme

When applying for interest equalization in the pre or post-shipment phase, an exporter needs to furnish a unique IES number.

Steps to generate an identification number

Below are the steps to generate a unique identification number for IES:

Step 1

Step 2

Once registered, login and apply for IES. Fill in the required details.

Step 3

Save the acknowledgement carrying the UIN, which will be sent to the registered email address and mobile number.

Step 4

Pay a user charge fee through one of the available online modes of payment. No changes can be made after a UIN is generated.

Eligibility criteria for IES

Below are some of the eligibility points as per Foreign Trade Policy (FTP) 2015-20 Handbook of Procedures:
· The goods being exported must be made by the exporter. It should follow the definition of ‘manufacture’ as per the policy document.
· In case of imported inputs, goods will be considered as originating in India only if they have seen significant value-addition in the country.
· Telecom products manufactured in the country are eligible for this scheme when they are exported. However, it is subject to the condition of value addition level as specified by the Department of Telecommunications.

Procedure to apply for Interest Equalisation Scheme

Below are the steps for IES for export credit:

Step 1

Go to the DGFT website and click on services. Under services, click on interest and then head to the equalisation scheme.

Step 2

An exporter is expected to generate UIN.

Step 3

UIN is valid for one year from the date of registration. Applications for IES are expected to be submitted to the bank during this period.

Step 4

Bank will scrutinize the application. The RBI issues guidelines for scrutiny and validation from time to time.

Modified norms of the Interest Equalisation Scheme

As per the modified norms of IES, the scheme has been extended to March, 2024. Any exporter looking to seek benefits under IES needs to be registered with DGFT.

Easy e-commerce exports with Amazon
Global Selling

To make exporting from India easy for sellers and MSMEs, Amazon Global Selling, an e-commerce exports program, provides assistance at every step of the export journey. From obtaining export documents to easy product listing and international shipping, Amazon Global Selling enables Indian exporters to sell internationally in a simple way via e-commerce. By registering as an Amazon Global Seller, your products can reach over 300 million customers across the world. The more the customers view your product; there are higher the chances of your sales.

More blogs on export schemes

1. A guide to the Export Oriented Units (EOUs) scheme and process to avail its benefits

2. Gold Card Scheme for exporters: Objectives, eligibility and benefits

3. How to register for the Market Access Initiative (MAI) scheme?

4. What is the NIRVIK scheme for exporters?

5. Understanding export incentives in India: What are the benefits for exporters?

6. All you need to know about the Transport and Marketing Assistance Scheme (TMA Scheme)

7. RoSCTL scheme: Benefits, eligibility and application procedure

8. What is Duty Entitlement Passbook (DEPB) Scheme for exporters?

9. Advance Authorisation Scheme: How does it help exporters?

10. What is Export Promotion Capital Goods Scheme (EPCG)?

11. What is Duty Drawback in export: Meaning, types and process

12. Understanding the benefits of RoDTEP scheme: A guide for Indian exporters

13. What is Authorized Economic Operator (AEO) Programme: How to register and obtain AEO certificate?

Frequently Asked Questions

Is DGFT Registration required to claim Interest Equalisation Scheme?

Yes, DGFT registration is mandatory to claim benefits under IES.

What is the validity of the Unique Identification Number under IES?

UIN is valid for one year from the date of registration under IES.

How is IES provided to exporters?

IES is provided to the exporters by the banks. The banks charge a reduced rate of interest from eligible exporters.

Published on December 27, 2022.

Sources:
1. https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12252&Mode=0
2. https://www.dripcapital.com/en-in/resources/blog/interest-equalization
3. https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=10159

What is an Importer of Record (IOR)?

Guide on how to export from India

Found this blog informative? Share it with your network

Sell across the world with Amazon Global Selling

Ready to start exporting from India?

Want to learn about Amazon Global Selling?

Here's your guide

Read more blogs

Disclaimer: Whilst Amazon Seller Services Private Limited ("Amazon") has used reasonable endeavours in compiling the information provided, Amazon provides no assurance as to its accuracy, completeness or usefulness or that such information is error-free. In certain cases, the blog is provided by a third-party seller and is made available on an "as-is" basis. Amazon hereby disclaims any and all liability and assumes no responsibility whatsoever for consequences resulting from use of such information. Information provided may be changed or updated at any time, without any prior notice. You agree to use the information, at your own risk and expressly waive any and all claims, rights of action and/or remedies (under law or otherwise) that you may have against Amazon arising out of or in connection with the use of such information. Any copying, redistribution or republication of the information, or any portion thereof, without prior written consent of Amazon is strictly prohibited.

*Map not to scale. The map has been used for design and representational purpose only, it does not depict the geographical boundaries of the country. These do not conform to the external boundaries of India recognized by the Survey of India.