New Credit Scheme Boosts India’s Export Growth
India’s economy heavily relies on exports, which make up approximately 21% of its Gross Domestic Product (GDP) and provide significant foreign exchange inflows. With over 45 million people engaged in export-oriented sectors, Micro, Small, and Medium Enterprises (MSMEs) play a vital role, contributing nearly 45% of total exports. Sustained growth in this sector is crucial for maintaining the country’s current account balance and overall economic stability.
Introducing the Credit Guarantee Scheme for Exporters
To support Indian exporters amid uncertain economic conditions, the Department of Financial Services has launched the Credit Guarantee Scheme for Exporters (CGSE), which became operational on December 1, 2025. This initiative allows banks and Member Lending Institutions (MLIs) to offer additional financial aid to exporters and aims to diversify export markets while enhancing global competitiveness.
Objectives and Benefits of the CGSE
The primary goal of the CGSE is to provide a credit guarantee specifically for exporters and MSMEs, thus enabling them to access additional credit. This assistance is expected to enhance liquidity and ensure the continuity of operations for businesses in the export sector. Furthermore, it opens doors for these companies to explore new markets and expand their reach.
The scheme offers collateral-free credit support of up to ₹20,000 crore to both direct and indirect exporter MSMEs through eligible MLIs. As of December 31, 2025, a total of 1,788 applications had been submitted for funding amounting to ₹8,599 crores, with 716 applications already sanctioned, totaling ₹3,141 crore. This response highlights a strong sense of confidence among exporters and MSMEs.
Facilitating Growth through Working Capital Loans
Exporters and MSMEs can secure working capital loans equivalent to up to 20% of their existing export credit or working capital limits under the scheme. This provision will empower businesses to develop their capabilities, boost their competitiveness on a global scale, and pursue diversification into new and emerging markets. By improving liquidity for these enterprises, the CGSE aims to sustain employment and ensure business operations continue smoothly.
The CGSE is set to remain open until March 31, 2026, or until guarantees amounting to ₹20,000 crores have been issued. This program is being executed by the Department of Financial Services in collaboration with the National Credit Guarantee Trustee Company Limited (NCGTC).
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