The Export Import Bank of India (Exim Bank) has launched a new lending programme to provide term loans up to Rs 15 crore at a concession of 50 per cent of bank interest rates for financing research and development (R&D) projects of export oriented companies.
Eligible R&D activities would include development and commercialisation of new product or application, R&D centres and setting up or expansion of pilot plants.
Eligible expenditures include acquisition of technology at the design stage, expenditure on external consultants for outsourcing a component of R&D project and costs of materials, surveys, technology demonstration studies and field trials.
According to Exim Bank, the promotional measure was aimed at encouraging R&D develop internationally competitive products.
Sources said business-driven research and development has been used extensively in foreign countries to build long term competitiveness of firms. And loans at concessional rates would encourage export oriented companies in India to spend more on R&D.
The loans would be given out mostly for a medium term of five to eight years. The interest differential would be absorbed in the export promotion reserve and therefore funding would be done largely out of profits. The facility would be open to all sectors as long as they satisfy the criteria of having 20 per cent of turnover as exports.
The export promotion reserve has been used for export market financing, strategic market entry support and a grant of 50 per cent of expenditure in getting international certification such as the ISO 9000 and ISO 14000. eta name="description" content="MONEY MARKET REPORT">
