The government on Friday rolled out seven more components of the Rs 25,060-crore Export Promotion Mission that will support use of alternative finance instruments, provide credit assistance to e-commerce exporters and assist in accessing markets.
The credit assistance for e-commerce exporters will provide them working capital at lower costs. They will also be eligible for interest subvention of 2.75% with an annual limit of Rs 15 lakh per exporter.
The Direct E-Commerce Credit Facility will provide guarantee cover of up to Rs 50 lakh with 90% coverage. They will also be eligible for guarantee coverage for inventory held overseas.
The support to exporters will also be provided to encourage them to adopt factoring. Factoring involves a business selling its bills due from a client to a third party. Through this they get a large chunk of their outstanding dues upfront while the third party collects the bill amount. On receiving payment from the customer, the remaining money is paid to the seller of the bill.
For this service the institutions charge a fee and interest. Under the EPM, the exporters using factoring will get a 2.75% subsidy on interest with an annual limit of Rs 50 lakh.
To enable Indian MSMEs to expand into new, or high-risk markets the government has decided to share the risk with the exporters ranging from 10-90% of the transaction value.
Another component of EPM operationalised on Friday will provide financial support to exporters to meet international testing, inspection, certification and other conformity requirements. The government will bear 60-75% of the costs of testing within the annual limit of Rs 25 lakh per exporter.
To mitigate logistics and warehousing constraints for Indian exporters and enable access to overseas storage, distribution, fulfilment centres. The support will cover overseas warehouses, display facilities and e-commerce export hubs.
To mitigate geographical disadvantages and inland connectivity gaps faced by hinterland exporters the EPM will provide 30% of actual cost of transport services to container depots and ports.
The package also includes providing trade intelligence and facilitation.
