Government Announces Rs 7,295-Cr Export Package to Enhance Exporters’ Access to Credit
The government of India unveiled a substantial export support package totaling Rs 7,295 crore to facilitate easier access to credit for exporters. This comprehensive package consists of a Rs 5,181-crore interest subvention scheme and a Rs 2,114-crore collateral support initiative, scheduled to be implemented over a six-year period from 2025 to 2031.
Speaking on the announcement, Additional Secretary in the Commerce Ministry, Ajay Bhadoo, highlighted that these strategic measures aim to address the pressing trade finance challenges faced by exporters in the current economic landscape.
Interest Subvention Scheme
One of the key components of the package is the interest subvention scheme, reintroduced after a hiatus of one year. Under this scheme, exporters will benefit from a subsidy on both pre- and post-shipment export credit, effectively reducing the overall cost of credit and enhancing the competitiveness of their products in the global market.
Micro, small, and medium enterprises (MSMEs) typically face interest rates ranging from 9.5% to 12.5% for export credit. The subsidy provided through this scheme will enable these enterprises to navigate the challenges posed by the global market, particularly in light of the tariffs imposed by the US.
This initiative marks the second phase of the Rs 25,060-crore export promotion mission sanctioned in November 2025. The first phase, focusing on market access support with a budget of Rs 4,531 crore, was launched on December 31, 2025.
Collateral Support for Export Credit
Additionally, the government introduced a collateral support scheme amounting to Rs 2,114 crore to facilitate export credit. This measure entails providing credit guarantee support to MSMEs for export-related working capital loans, with collateral guarantee coverage of up to Rs 10 crore per firm.
The collateral support initiative offers guarantee coverage of up to 85% for micro and small exporters and up to 65% for medium exporters, aiming to bolster bank lending for export-oriented MSMEs.
Implementation and Scope
Both the interest subvention scheme and collateral support scheme apply exclusively to exports from a predefined positive list of products, encompassing sectors such as Defence and SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies). However, certain items such as restricted goods, waste and scrap, and PLI-covered items are excluded from these measures.
The implementation and operational guidelines for these schemes will be issued by the relevant authorities, ensuring a seamless integration into the existing export promotion frameworks.
Industry Response
The Federation of Indian Export Organisations (FIEO) commended the government’s initiatives under the NIRYAT PROTSAHAN sub-scheme of the EPM, emphasizing the positive impact on MSME exports and access to affordable trade finance. FIEO President SC Ralhan applauded these measures for addressing critical challenges faced by MSME exporters, including high credit costs and collateral requirements.
He further noted that the collateral guarantee framework will incentivize banks to extend lending to export-oriented MSMEs, catering to the long-standing demand of small exporters for enhanced access to credit facilities.
These interventions, set to be initially piloted and fine-tuned based on feedback and data analysis, are poised to significantly enhance the competitiveness of Indian MSMEs in the global market.
