Indian finance minister Mr Chidambaram has announced an extra 2% subsidy in pre-shipment and post-shipment credit for the textiles, leather, marine and handicrafts sectors following the steep appreciation in the rupee versus the dollar.

The measure is subject to the condition that the interest rate, after subvention, does not fall below 7%. It follows another 2% subsidy earlier this year and is valid until March 31.

Textile bodies have requested a revision of drawback rates and have been asked to submit relevant data to the Drawback Committee so that it can study the proposal and make its recommendations to the government.

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