New Initiatives to Boost MSME Exports Launched by Government
The Government of India has unveiled two significant measures under the NIRYAT PROTSAHAN sub-scheme, part of the broader Export Promotion Mission, aimed at boosting exports from Micro, Small, and Medium Enterprises (MSMEs) and enhancing their access to trade finance. These initiatives are designed to reduce financial burdens on exporters and facilitate the growth of India’s export sector.
Interest Subvention for Export Credit
The first initiative focuses on providing interest subvention for both pre- and post-shipment export credit. This measure is tailored to alleviate the cost of export credit and tackle the working capital challenges that MSME exporters frequently encounter. Eligible lending institutions will offer rupee export credit, with a base interest subvention of 2.75 percent for MSME exporters. Additionally, there is room for further incentives aimed at promoting exports to specific under-represented or emerging markets, contingent on operational readiness.
To qualify for the interest subvention, exports must comply with a notified positive list at the Harmonised System six-digit level, which encompasses around 75 percent of India’s tariff lines, reflecting significant MSME involvement. For the fiscal year 2025–26, an exporter can claim a maximum cap of ₹50 lakh per Importer Exporter Code (IEC). The rates will be reviewed bi-annually to align with both domestic and international benchmarks.
Collateral Support for Export Credit
The second initiative addresses collateral support for export credit, a critical concern for many MSME exporters. This support will be provided in collaboration with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to reduce collateral constraints and enhance access to bank financing. The scheme will offer guarantee coverage of up to 85 percent for Micro and Small exporters, and up to 65 percent for Medium exporters, with a maximum guaranteed exposure of ₹10 crore per exporter for the financial year.
This initiative is designed to bolster existing credit guarantee frameworks and promote increased bank lending toward export-focused MSMEs. Detailed guidelines for implementing this collateral support will soon be released by CGTMSE, following an initial pilot phase to ensure viability before broader application.
Driving Growth Through Export Promotion
Both interventions will operate on a pilot basis, allowing for ongoing monitoring and data-driven adjustments. Through the Export Promotion Mission, the government is committed to lowering the costs associated with exporting, expanding access to essential financing, and enhancing India’s export profile. This is anticipated to facilitate greater integration of Indian exporters into global value chains and foster sustained growth driven by exports.
Launched with an impressive budget of ₹25,060 crore for the period from fiscal years 2025–26 to 2030–31, the Export Promotion Mission aims to elevate India’s export competitiveness, focusing on not only MSMEs but also first-time exporters and sectors that are labor-intensive. Jointly managed by the Department of Commerce, Ministry of MSME, and Ministry of Finance, the Mission consists of two integrated sub-schemes: NIRYAT PROTSAHAN, emphasizing access to affordable trade finance, and NIRYAT DISHA, which provides support in non-financial areas such as market access and regulatory compliance.
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