New Delhi, 2 January: The Government has launched two new components under the Export Promotion Mission aimed at strengthening MSME exports and ensuring easier access to affordable credit for small traders. This was announced by the Ministry of Commerce on Friday.
The first component relates to interest subsidy on pre- and post-shipment export credit. Its purpose is to reduce the cost of export credit and ease working capital challenges faced by MSME exporters. Under this scheme, eligible credit institutions will provide interest subsidies on pre- and post-shipment export credit.
An interest subsidy is a government subsidy that lowers the loan interest rate.
The ministry stated that a basic interest subsidy of 2.75 percent will be provided, along with additional incentives for exports to notified under-represented or emerging markets, based on operational readiness.
The subsidy will apply only to exports under the notified positive list of tariff lines at the six-digit level of the Harmonized System, covering about 75 percent of India’s tariff lines, reflecting significant MSME participation.
For the financial year 2025-26, an annual limit of Rs 50 lakh per exporter firm has been set. The applicable rates will be reviewed biannually in March and September, considering domestic and global benchmarks.
The positive list has been prepared using a transparent, data-driven approach prioritising labour-intensive and capital-intensive sectors, number of MSMEs, and value addition. Restricted and prohibited items, waste and scrap, and products covered under overlapping incentive schemes have been excluded. Strategic exports such as defence and SCOMET-notified products are included. Detailed operational guidelines will be issued by the Reserve Bank of India. A pilot rollout will be conducted to allow for improvements based on implementation feedback.
The second component focuses on collateral support for export credit, aiming to address difficulties faced by MSME exporters and improve their access to bank finance.
Under this step, collateral guarantee support for export credit is being introduced in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises. Micro and small exporters will receive up to 85 percent guarantee coverage, and medium exporters up to 65 percent, with a maximum outstanding guaranteed exposure of Rs 10 crore per exporter in one financial year.
Both components will be implemented on a pilot basis with continuous monitoring and data-driven improvements. Through the Export Promotion Mission, the Government’s goal is to reduce export costs, enhance access to finance, strengthen India’s export brand, and diversify export markets. This will help Indian exporters, especially MSMEs, integrate more deeply into global value chains and contribute steadily to export-led growth.
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