Govt Announces ₹7,295-Crore Export Package with Enhanced Credit Support for MSMEs
The government has unveiled a comprehensive ₹7,295-crore export support package under the Export Promotion Mission, featuring a ₹5,181-crore interest subvention scheme providing 2.75% rate reduction on export credit and a new ₹2,114-crore collateral support mechanism offering up to ₹10-crore guarantee coverage per firm. Both measures will be implemented over six years (2025-31) to address trade finance challenges and improve MSME exporters' access to competitive credit, with RBI and CGTMSE serving as implementing agencies.
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The government has announced a comprehensive ₹7,295.00 crore export support package under its Export Promotion Mission, comprising two key components designed to improve exporters' access to credit. The package includes a ₹5,181.00 crore interest subvention scheme and a newly introduced ₹2,114.00 crore collateral support mechanism, both to be implemented over six years through FY31.
Additional Secretary in the Commerce Ministry Ajay Bhadoo emphasized that these interventions will address critical trade finance issues faced by exporters, particularly at a time when global trade is experiencing headwinds.
Comprehensive Interest Subvention Framework
The interest subvention scheme represents the second component of the ₹25,060.00 crore Export Promotion Mission approved in November, following the market access support component worth ₹4,531.00 crore that was rolled out on December 31.
| Parameter: | Details |
|---|---|
| Total Subvention Budget: | ₹5,181.00 crore |
| Implementation Period: | Six years (2025-31) |
| Interest Subvention Rate: | 2.75% for eligible MSMEs |
| Annual Benefit Cap: | ₹50.00 lakh per exporting firm |
| Credit Coverage: | Pre-shipment and post-shipment rupee export credit |
| Rate Review: | Bi-annually in March and September |
The subvention rates will be reviewed based on domestic and global benchmarks, with the Reserve Bank of India serving as the implementing agency alongside the Directorate General of Foreign Trade. A pilot roll-out will be undertaken with scope for refinement based on implementation feedback.
New Collateral Support Mechanism
The government has introduced a significant ₹2,114.00 crore collateral support system specifically designed to enhance credit guarantee support for MSMEs seeking export-linked working capital loans.
| Support Type: | Coverage Details |
|---|---|
| Maximum Guarantee: | ₹10.00 crore per firm |
| Micro & Small Exporters: | Up to 85% guarantee coverage |
| Medium Exporters: | Up to 65% guarantee coverage |
| Implementation Agency: | CGTMSE |
| Integration: | Complements existing credit-guarantee mechanisms |
This intervention is designed to increase bank lending for export-oriented MSMEs by addressing collateral requirements that typically restrict access to competitive financing.
Product Coverage and Eligibility Framework
Both the interest subvention and collateral support measures apply exclusively to exports from a selected positive list of products. The scheme covers defence and SCOMET (Special Chemicals, Organisms, Materials, Equipment and Technologies) products, while excluding restricted items, waste and scrap, and production-linked incentive covered items.
The ministry noted that MSME exporters typically face borrowing costs ranging between 9.50% and 12.50% due to lack of collateral or guarantees. The combined package is expected to deliver substantial improvements in global competitiveness for Indian exporters.
Implementation and Guidelines
Detailed guidelines for the interest subvention scheme will be released by the RBI and DGFT, while CGTMSE will notify guidelines for the collateral support mechanism. Both components will undergo pilot phases before integration into a comprehensive revision of export-promotion frameworks, ensuring effective implementation and maximum benefit delivery to the target beneficiaries.
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