In a significant move to bolster India's export sector, lenders have swiftly sanctioned over ₹3,361 crore to hundreds of applicants within just one month of launching a major new credit guarantee initiative. The scheme aims to provide a crucial financial cushion for exporters, particularly micro, small, and medium enterprises (MSMEs), who are navigating challenging global trade conditions, including steep tariffs imposed by the United States.
Rapid Deployment of Export Credit Support
The Department of Financial Services (DFS) revealed that the Credit Guarantee Scheme for Exporters (CGSE) has seen strong uptake since becoming operational on December 1, 2025. By January 2, 2026, financial institutions had received applications seeking a total of ₹8,764.81 crore from 1,840 exporters. Out of these, approvals have been granted for ₹3,361.83 crore, benefiting 774 applicants.
This ₹20,000-crore scheme, which received Union Cabinet approval on November 12, is a cornerstone of the government's strategy to enhance the global competitiveness of Indian goods. It provides a 100 per cent credit guarantee coverage through the National Credit Guarantee Trustee Company Ltd (NCGTC) to member banks and lending institutions. This guarantee empowers these institutions to extend additional credit facilities up to the full scheme amount to eligible exporters, mitigating their risk and encouraging lending.
Broader Financial Ecosystem Shows Robust Health
The DFS statement also highlighted the impressive performance of the broader banking sector, which underpins such targeted schemes. Scheduled Commercial Banks (SCBs) recorded their highest ever aggregate net profit of ₹4.01 lakh crore. Notably, Public Sector Banks (PSBs) achieved a milestone net profit of ₹1.78 lakh crore during the 2024-25 fiscal year, with their performance in the first half of 2025-26 already reaching ₹0.94 lakh crore.
The health of PSBs has dramatically improved over the past decade. Their Gross Non-Performing Assets (GNPA) ratio plummeted to a mere 2.30% (₹2.65 lakh crore) in September 2025, from a peak of 14.58% (₹8.96 lakh crore) in March 2018. Concurrently, their Capital Adequacy Ratio strengthened by 451 basis points to 15.96% in September 2025, up from 11.45% in March 2015. This financial robustness allows banks to participate actively in government-backed lending programs.
Parallel Support for MSME Manufacturing
Alongside the export-focused CGSE, the government's Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME) is also driving growth in the manufacturing sector. This scheme incentivizes lenders to provide credit up to ₹100 crore to MSME borrowers specifically for purchasing equipment, plant, and machinery. As of December 2025, banks have sanctioned a substantial ₹16,836 crore against a staggering 8.96 lakh applications under this initiative.
The CGSE will remain in effect until March 31, 2026, or until the full ₹20,000 crore guarantee commitment is utilized. This timely intervention is designed to help Indian exporters diversify their markets and build resilience against international trade headwinds, securing India's position in the global supply chain.
