New Delhi, Apr 29 (IANS): India's apparel export industry has urged the Centre to extend the interest equalisation scheme for a minimum of two years at a rate of 5 per cent.

The scheme aims to boost exports, particularly from the MSME sector, by providing interest subvention rate on pre- and post-shipment credit basis.

In a letter to Commerce and Industry Minister Piyush Goyal, Apparel Export Promotion Council (AEPC) Chairman A. Sakthivel said: "Given the extremely volatile and uncertain cash flow situation of the apparel exporters, we request you to kindly announce continuity of the interest subvention scheme which expired on 31 March 2020."

"It is further requested that this enhanced 5 per cent 'Interest Equalisation Scheme' so far available to MSMEs may also kindly be extended to all the apparel exporters for at least two years up to 31 March 2022 to enable the industry to have affordable access to credit. In the absence of any announcement on this scheme, the banks are debiting the accounts of the exporters."

Besides, Sakthivel requested the Centre to include extension of packing credit and forward contract by 6 months without penal interest and waiver of penalty imposed on forward covers by some banks.

He also called for an increase in working capital limits by minimum 25 per cent without any additional collateral.