Mumbai: The government has announced a Rs1,400 crore relief package for exporters, including increased rates of duty drawback with effect from April 1, 2007, to provide relief amidst a continuing appreciation of the rupee.

While the increased rate of duty drawback on nearly all products would cost the exchequer Rs800 crore, the government would bear another Rs600 crore on provision of concessional credit to exporters in certain sectors.

"The drawback rates have undergone significant changes in line with changes in the prices of inputs and duties. The rates have been revised upward on nearly all products," finance secretary D Subbarao said.

The new drawback rate for knitted shirts will now be 10 per cent with a cap of Rs48 per piece as against the existing 7 per cent with a cap of Rs31 per piece, finance ministry officials pointed out.

The measures announced would also benefit for exporters in textile, ready made garment, leather exports, handicraft, engineering products, processed agriculture products, marine products, sports goods, toys and the entire SME sector.

Banks will now charge interest rate not exceeding BPLR minus 4.5 per cent on pre-shipment credit up to 180 days and post-shipment credit up to 90 days on the outstanding amount for period between April 1 to December 31 this year, officials said.

The rupee has gained more than 9 per cent against the dollar since the start of the year, and touched a nine-year high of Rs40.28 per dollar in late May.

On June 12, the rupee tumbled about 1 per cent to 40.50 per dollar forcing the Reserve Bank of India (RBI) to step in to sell rupees, but without any gain.