Government Launches Two Major Credit-Linked Schemes to Support Exporters Under New Export Promotion Mission
- ByStartupStory | January 5, 2026
The Union government on Friday unveiled two significant credit-linked interventions under the flagship Export Promotion Mission (EPM) aimed at improving access to affordable financing for Indian exporters, particularly micro, small and medium enterprises (MSMEs). The introduction of these measures is part of a broader push to strengthen the country’s export ecosystem amid global headwinds and rising trade costs.
With an overall budgetary outlay of ₹7,295 crore, the new measures are designed to reduce the cost of export credit and ease collateral constraints that have traditionally hindered smaller firms from tapping export opportunities. These interventions complement the first component of the EPM, a ₹4,531-crore Market Access Support (MAS) scheme, which was rolled out at the end of December 2025 to help exporters diversify into new markets and product segments.
Interest Subvention Scheme: Reducing Cost of Export Credit
The centerpiece of the new initiatives is an interest subvention scheme worth ₹5,181 crore that focuses on making export finance more affordable. Under this scheme, eligible exporters will receive a subsidy on interest charged for both pre-shipment and post-shipment rupee export credit. The government has pegged the base subsidy at about 2.75 per cent, benchmarked against domestic and international interest rates, making borrowing considerably less expensive for exporters.
This subsidy will apply to credit extended by designated lending institutions and is structured to benefit firms in products and sectors featured on a notified positive list which covers roughly 75 per cent of India’s tariff lines. A notable feature of this scheme is that exporters tapping into new and emerging markets may be eligible for additional incentives, aiming to further stimulate market diversification. The annual benefit is capped at ₹50 lakh per exporter to ensure focused support where it’s most needed.
According to officials, detailed operational guidelines for this scheme, including interest calculations, eligibility criteria, and implementation timelines, will be issued by the Reserve Bank of India (RBI) and the Directorate General of Foreign Trade (DGFT) in due course.
Collateral Support to Ease Bank Lending
The second component under the credit interventions is a collateral support scheme valued at ₹2,114 crore. It aims to address the persistent problem of insufficient security that many MSME exporters face when seeking bank financing for export-linked working capital. Under the initiative, credit guarantee coverage will be provided in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
The guarantee framework will cover up to 85 per cent of outstanding credit exposure for micro and small exporters and about 65 per cent for medium enterprises, with a limit of ₹10 crore per exporter per financial year. This support is expected to encourage banks to lend more proactively to export-oriented firms by lowering the risk associated with unsecured lending.
Taken together, these two schemes provide both price-based and risk-based support to Indian exporters, which trade stakeholders say is crucial in an export environment marked by rising global financing costs and increased competitive pressures in key markets.
The government’s Export Promotion Mission, launched with a broad mandate to bolster export competitiveness over six years through a ₹25,060-crore framework is built around two integrated sub-schemes: Niryat Protsahan, focused on trade finance and credit facilitation, and Niryat Disha, which emphasises market readiness and non-financial support.
Officials say the new credit-linked measures are a step toward addressing long-standing trade finance constraints and are expected to deepen India’s integration into global value chains by lowering barriers to export trade for smaller firms across the country.
Follow Startup Story
Related Posts
