New Delhi: Days after launching the Market Access Support (MAS) intervention under the Export Promotion Mission (EPM), the Center on Friday introduced two financial support measures to boost exports of micro, small and medium enterprises (MSMEs), including an interest subsidy scheme and an export credit guarantee guarantee.
The interventions launched under the Niryat Protsahan EPM sub-programme are aimed at supporting smaller exporters facing working capital and collateral constraints, reducing export credit costs and facilitating access to finance, the Ministry of Commerce said in a statement.
Interest subsidy
The first measure provides interest subsidy on pre-shipment and post-shipment export credit with a base interest subsidy of 2.75% on rupee export credit provided by eligible credit institutions. The support is aimed at reducing borrowing costs and alleviating pressures on liquidity MSME exporters, especially during the shipping and fulfillment cycle.
Another incentive may be offered for exports to under-represented or emerging markets, subject to operational readiness, the ministry said.
The interest subsidy will be applicable only to exports covered by the notified positive list of tariff items at the six-digit level under the Harmonized System covering around 75% of India’s tariff items where MSME participation is high.
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Annual cap ₹For FY26, $50 billion per exporter has been prescribed based on domestic and global benchmarks.
The ministry said the positive list was drawn up using a data-driven approach that prioritizes labour-intensive and capital-intensive industries with a high concentration of MSMEs and value addition, while excluding restricted or prohibited items, waste and scrap and products already covered by overlapping incentive schemes.
Defense and SCOMET items were included to support strategic exports. Operational guidelines for the interest rate support will be issued by the Reserve Bank of India and the scheme will be launched on a pilot basis with the possibility of refinement.
Collateral guarantee
The second intervention introduces an export credit collateral guarantee in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), addressing one of the key barriers MSME exporters face in accessing bank finance.
Under this facility, guarantee coverage will be provided up to 85% for micro and small exporters and up to 65% for medium exporters with a ceiling ₹10 crores on outstanding guaranteed exposure per exporter in a financial year.
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The government said the collateral guarantee is designed to complement existing loan guarantee mechanisms and encourage banks to step up lending to export-oriented SMEs. Detailed guidelines will be communicated to the CGTMSE, followed by a pilot phase before the facility is integrated into the wider redesign of export promotion frameworks.
Both interventions will initially be implemented on a pilot basis with ongoing monitoring and refinement based on data, the ministry said.
Useful for MSMEs
From an industry perspective, Vinod Kumar, president of the SME Forum, said interest support measures and collateral guarantees could ease long-standing credit constraints for MSME exporters, especially smaller firms facing high borrowing costs and lack of collateral, and help them compete more effectively in new and emerging export markets.
According to government data, MSME exports have witnessed a remarkable increase which has been increasing since 2005 ₹3.95 trillion in 2020–21 ₹12.39 trillion by 2024-25, underscoring their vital role in boosting the Indian economy and boosting global trade.
The number of exporting SMEs has also increased significantly – from 52,849 in 2020-21 to 173,350 in 2024-25. MSMEs contributed 45.73% to the country’s exports in 2023-24.
Earlier moves
Earlier this week, the government launched the Market Access Support (MAS) intervention under Export Promotion Mission. Implemented under the Niryat Disha sub-programme, the initiative aims to strengthen buyer connectivity, improve visibility of Indian products overseas and help exporters – especially small businesses – tap into priority and emerging markets.
The broader objective of the Export Promotion Mission is to reduce the cost of exports, expand access to finance, diversify export markets and strengthen India’s export brand, enabling SMEs to integrate more deeply into global value chains.
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Total cost export promotion mission ₹25,060 crore for FY26 to FY31 is jointly implemented by Ministry of Commerce, Ministry of MSME and Ministry of Finance.
It comprises two sub-programmes – Niryat Protsahan, focused on trade finance support, and Niryat Disha, which focuses on non-financial enablers such as market access, branding, compliance, logistics and trade intelligence.
