PTI New Delhi

Seeking resumption of interest subsidy scheme, the Federation of Indian Export Organisations (FIEO) on Tuesday said the additional 26 per cent US tariffs from April 9 will significantly raise American importers' customs duty bills, delaying payments to Indian exporters. The organisation urged the government to immediately announce a 5 per cent interest subvention to ease the looming liquidity crunch.

"From April 9, the US importers will have to pay 26 per cent duty upfront. Earlier it was zero-4 per cent. The high tariffs will put an additional burden on them, and for that, they would have to seek credit and delay our payments. The tariffs are going to impact the payment cycle for us. We request the government to immediately announce an interest subvention scheme for all the exporters," FIEO President SC Ralhan told PTI.

In India, the repo rate stands at about 6.25 per cent, with exporters bearing interest rates ranging between 8 to 12 per cent or even more, depending on the spread and risk assessment of the borrower by the Authorised Dealer Banks.

In competing countries, the interest rate is very low. For instance, the central bank rate in 2025 is 3.1 per cent in China, 3 per cent in Malaysia, 2 per cent in Thailand, and 4.5 per cent in Vietnam. About 11,000 exporters avail the benefits under the scheme, which ended last year.