The Indian government on Friday rolled out a major financial package worth ₹7,295 crore designed to strengthen the country's export sector by easing access to crucial credit. The comprehensive initiative aims to tackle the trade finance hurdles that exporters, particularly micro, small, and medium enterprises (MSMEs), are currently facing amid a challenging global trade environment.
Two-Pronged Financial Support for Exporters
The substantial package is split into two key components. The first is an Interest Subvention Scheme with an outlay of ₹5,181 crore. Under this, eligible MSME exporters will receive a subsidy on the interest for both pre-shipment and post-shipment rupee export credit, making loans more affordable. The government will provide an interest subvention ranging from 2.75%, helping firms secure credit at competitive rates.
The annual benefit for a single company is capped at ₹50 lakh. This scheme will be implemented by the Reserve Bank of India (RBI) in coordination with the Directorate General of Foreign Trade (DGFT). Officials stated that the subvention rates will be reviewed bi-annually in March and September, based on prevailing domestic and global benchmarks. A pilot phase will be conducted initially to refine the mechanism based on feedback.
Collateral Guarantee to Unlock Working Capital
The second pillar is a Collateral Support Scheme valued at ₹2,114 crore. This measure is specifically tailored to aid MSMEs by providing a credit guarantee cover for export-linked working capital loans. It addresses a common pain point where lack of collateral restricts credit flow.
Under this scheme, a collateral guarantee of up to ₹10 crore per firm will be available. The extent of guarantee coverage is tiered: up to 85% for micro and small exporters, and up to 65% for medium exporters. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) will notify the guidelines, and the scheme will also begin with a pilot run.
Scope, Exclusions, and Broader Mission
Commerce Ministry Additional Secretary Ajay Bhadoo emphasized that the measures are a direct response to the finance challenges constraining exporters. Both schemes will apply only to exports of products listed on a selected positive list. Notably, defence items and SCOMET goods are included, while restricted products, waste and scrap, and items already covered under Production-Linked Incentive (PLI) schemes will be excluded.
These interventions are part of the larger ₹25,060-crore Export Promotion Mission (EPM) that received Cabinet approval in November 2025. They are scheduled to be implemented over a six-year period from 2025 to 2031. The ministry clarified that this new package is intended to complement existing credit-guarantee mechanisms, with the ultimate goal of boosting bank lending to export-oriented MSMEs and integrating into a broader overhaul of India's export promotion frameworks.
