India has unveiled a $810 million export credit support package under the Export Promotion Mission to strengthen exporters’ liquidity and boost global competitiveness.
The Centre has announced a Rs. 7,295 crore (US $ 810 million) export support package aimed at improving exporters’ access to trade finance, comprising a Rs. 5,181 crore (US $ 575 million) interest subvention scheme and Rs. 2,114 crore (US $ 234 million) in collateral support. Both measures will be implemented over a six-year period from 2025 to 2031.
According to the ministry, the first intervention focuses on interest subvention for pre- and post-shipment export credit, with the objective of lowering borrowing costs and easing working capital pressures faced by MSME exporters. Under the scheme, interest subvention will be provided on eligible rupee-denominated export credit extended by approved lending institutions.
A base interest subvention of 2.75% has been announced, along with a provision for an additional incentive for exports to notified under-represented or emerging markets, subject to operational readiness. The ministry said the support will apply only to exports falling under a notified positive list of tariff lines at the Harmonized System (HS) six-digit level.
The positive list covers around 75% of India’s tariff lines and reflects sectors with high MSME participation. An exporter-wise annual cap of Rs 50 lakh (US $ 55,000) per firm has been set for FY 2025–26. The applicable interest subvention rates will be reviewed twice a year, in March and September, based on domestic and global benchmarks.
The ministry said the positive list has been prepared using a transparent, data-driven methodology, with priority given to labor-intensive and capital-intensive sectors, MSME concentration and value addition. Restricted and prohibited items, waste and scrap, and products covered under overlapping incentive schemes have been excluded, while defense and SCOMET-notified products have been included to support strategic exports. Detailed operational guidelines for this intervention will be issued by the Reserve Bank of India, and the scheme will initially be implemented on a pilot basis.
The second intervention under the Niryat Protsahan sub-scheme relates to collateral support for export credit, aimed at improving MSME exporters’ access to bank finance. Under this measure, collateral guarantee support will be provided in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
The scheme offers guarantee coverage of up to 85% for micro and small exporters and up to 65% for medium exporters, with a maximum outstanding guaranteed exposure of Rs. 10 crore (US $ 1.11 million) per exporter in a financial year. The ministry said this intervention is intended to complement existing credit guarantee mechanisms and encourage higher bank lending to export-oriented MSMEs.
Detailed guidelines for the collateral support scheme will be notified by the CGTMSE, followed by a pilot rollout and eventual integration into a broader overhaul of export promotion frameworks. Both interventions will be implemented on a pilot basis, with continuous monitoring and scope for data-driven refinements based on implementation experience.
News Courtesy : Apparel resources