PTI
New Delhi
The government on Friday announced a Rs 7,295-crore export support package, comprising a Rs 5,181-crore interest subvention scheme along with a Rs 2,114-crore collateral support, to improve exporters’ access to credit.
Both measures will be rolled out over a period of six years (2025-31).
Additional Secretary in the Commerce Ministry Ajay Bhadoo said that these interventions will address the trade finance issues of exporters.
Under the interest subvention scheme, which has been resumed after a gap of one year, exporters will get a subsidy on pre- and post-shipment export credit.
It will help cut the cost of credit for exporters.
Maicro, small and medium enterprises (MSMEs) currently pay anywhere between 9.5 per cent and 12.5 per cent for export credit, and the subsidy will make their goods competitive in the tough global market, which has been disrupted due to high tariffs imposed by the US.
This is the second component of the Rs 25,060-crore export promotion mission (EPM) approved in November 2025.
The first component — market access support with an outlay of Rs 4,531 crore — was rolled out on December 31, 2025.
The subvention scheme will help exporters from identified sectors to avail of rupee export credit at competitive rates at a time when global trade is facing headwinds.
Under the scheme, the government will provide subsidy benefits in the range of 2.75 per cent to eligible MSME exporters.
According to the commerce ministry, the subvention rates will be reviewed bi-annually in March and September based on domestic and global benchmarks.
The annual benefit is capped at Rs 50 lakh per firm.
The detailed guidelines of the scheme will be released by the RBI, which is the implementing agency, along with the Directorate General of Foreign Trade (DGFT).
A pilot roll-out will be undertaken, with a scope for refinement based on implementation feedback, it said.
Even with the cap, 75 per cent of the total tariff lines or product categories (over 12,000) would be covered.
The interest rate subvention that has been capped at 2.75 per cent for now will be benchmarked against the Repo or policy rates of India and comparable economies, and would be adjusted as the interest rates move, Bhadoo said.
When the policy rates go down, the subsidy will also come down.
The rates will be adjusted every March and September, he said, adding that an additional interest subsidy will be provided to MSMEs exporting to new and emerging markets.
The additional benefit will be notified separately.
Of the total allocation of Rs 5,181 crore, about Rs 850 crore will be used this year for settling claims of the previous interest subvention scheme that expired in December 2024.
For the current financial year, which has just one quarter now, Rs 300 crore would be required for the subsidy.
The earlier scheme that expired in December 2024 provided a flat interest subsidy of 3 per cent.
The government has also announced a Rs 2,114-crore collateral support for export credit.
Under this, credit guarantee support will be given to MSMEs for export-linked working capital loans.
Up to Rs 10 crore collateral guarantee per firm will be provided under this support measure.
The guarantee coverage up to 85 per cent will be available for micro and small exporters, and up to 65 per cent for medium exporters.
According to the DGFT, interest subvention and collateral support apply only to exports from a selected positive list of products. Defence and SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) products are covered in these measures.
However, restricted items, waste and scrap, and PLI (production-linked incentive) covered items will be out of the purview of these measures.
This intervention complements existing credit-guarantee mechanisms and is designed to increase bank lending for export-oriented MSMEs, the ministry said.
Guidelines will be notified by CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises), followed by a pilot phase and subsequent integration into a comprehensive revision of export-promotion frameworks, it added.
Commenting on the measures, the Federation of Indian Export Organisations (FIEO) said the launch of two critical interventions under the NIRYAT PROTSAHAN sub-scheme of the EPM would strengthen MSME exports and significantly improve access to affordable trade finance.
These announcements will address two of the biggest challenges faced by MSME exporters — high cost of credit and lack of collateral, FIEO President SC Ralhan said, adding that these measures will greatly enhance the competitiveness of Indian MSMEs in global markets.
He also said that the collateral guarantee framework will encourage banks to increase lending to export-oriented MSMEs and complement existing credit guarantee schemes.
It is a long-standing demand of the exporting community, particularly small exporters who struggle to meet collateral requirements.
“Both interventions will be implemented initially on a pilot basis, with continuous monitoring and refinements based on feedback and data analysis,” Ralhan said.
