Government Launches Two Schemes to Boost MSME Exports

The Ministry of Commerce has announced the launch of Interest Subvention on Export Credit Scheme and Collateral Support for Export Credit  Scheme under the Export Promotion Mission to help MSMEs by making trade finance more affordable and accessible.

• These two initiatives are part of the Niryat Protsahan sub-scheme of Export Promotion Mission.
• It is a flagship program approved by the Union Cabinet in November 2025.

Interest Subvention on Export Credit

• Aim: To reduce the cost of export credit and ease working capital constraints for MSME exporters.
• Key Features:
• • Financial Support: A base interest subvention (reduction) of 2.75% will be provided on pre- and post-shipment rupee export credit.
  • Extra Incentive: Additional benefits may be offered for exports to specific under-represented or emerging markets.
  • Covered Products: The benefit applies only to exports under a “Positive List” of about 75% of India’s tariff lines, which have high MSME participation.
  • Included: Labour-intensive, capital-intensive, and high value-addition sectors. Defence and strategic (SCOMET) items are also included.
  • Excluded: Restricted/prohibited items, waste/scrap, and products already covered by other incentive schemes.
  • Annual Cap: A maximum benefit of Rs 50 lakh per exporter for FY 2025-26.
• Review: The applicable rates will be reviewed every six months in March and September.
• Implementation: The Reserve Bank of India (RBI) will issue detailed guidelines. 

Collateral Support for Export Credit

• Aim: To improve MSME exporters’ access to bank finance by addressing collateral constraints.
• Key Features:
  • Partnership: Implemented in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
  • Guarantee Coverage:
    • Up to 85% for micro and small exporters.
    • Up to 65% for medium exporters.
  • Exposure Limit: Maximum guaranteed support of Rs 10 crore per exporter in a financial year.
  • Purpose: This scheme complements existing credit guarantee mechanisms to encourage banks to lend more to export-oriented MSMEs.
• Implementation: Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) will notify detailed guidelines. 
  • Implementation will begin with a pilot phase before being integrated into a broader export promotion framework.

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