Government Launches Credit, Guarantee Support to Boost MSME Exports
NIRYAT PROTSAHAN Rollout Aims to Ease MSME Export Credit Stress
New Delhi: As part of the initial rollout of the Government of India’s Export Promotion Mission, the Ministry of Commerce and Industry today announced two financial interventions aimed at strengthening the export capacity of micro, small and medium enterprises (MSMEs), a segment that accounts for a substantial share of India’s manufacturing base but continues to face persistent credit and working-capital constraints.
The two measures, launched under the NIRYAT PROTSAHAN sub-scheme, focus on reducing the cost of export credit and easing access to bank finance for MSME exporters. Together, they represent an attempt to address long-standing structural bottlenecks that have limited the ability of smaller firms to scale up exports, diversify markets and compete effectively in global value chains.
The first intervention introduces interest subvention for both pre-shipment and post-shipment export credit extended to MSMEs by eligible lending institutions. The stated objective is to lower borrowing costs and ease working-capital pressures during the export cycle, which often requires firms to lock up capital well before shipment and payment realisation. Under the scheme, a base interest subvention of 2.75 per cent will be provided on rupee export credit, with a provision for additional incentives for exports to notified under-represented or emerging markets, subject to operational readiness.
The interest support will be available only for exports falling under a notified positive list of tariff lines at the Harmonised System six-digit level. This list covers approximately 75 per cent of India’s tariff lines and has been designed to reflect areas with high MSME participation. An exporter-wise annual cap of ₹50 lakh per Importer Exporter Code has been prescribed for the financial year 2025–26, placing a ceiling on the benefit per firm while allowing wider coverage across exporters.
According to the Ministry, the applicable interest subvention rates will be reviewed twice a year, in March and September, with reference to domestic and global benchmarks. This mechanism is intended to ensure that the support remains responsive to changing financial conditions rather than being locked into static rates. The positive list underpinning the scheme has been prepared using a data-driven and transparent methodology, prioritising labour-intensive and capital-intensive sectors, MSME concentration and value addition, while excluding restricted and prohibited items, waste and scrap, and products already covered under overlapping incentive schemes.
Notably, defence items and products notified under the Special Chemicals, Organisms, Materials, Equipment and Technologies framework have been included, reflecting a policy decision to support strategic exports alongside traditional MSME-led sectors. Detailed operational guidelines for the interest subvention component will be issued by the Reserve Bank of India, and the scheme will be rolled out initially as a pilot, with scope for refinements based on implementation feedback.
The second intervention addresses a different but related constraint faced by MSME exporters: the lack of adequate collateral to access bank credit. Under this measure, a collateral guarantee support for export credit is being introduced in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises. The scheme will provide guarantee coverage of up to 85 per cent for micro and small exporters and up to 65 per cent for medium exporters, with a maximum outstanding guaranteed exposure of ₹10 crore per exporter in a financial year.
By reducing the credit risk borne by lending institutions, the government aims to incentivise banks to extend higher volumes of export credit to MSMEs that may otherwise be constrained by limited balance sheets or insufficient collateral. The Ministry said the intervention is designed to complement existing credit guarantee mechanisms rather than replace them, and to expand the overall flow of institutional finance to export-oriented MSMEs. Detailed guidelines for this component will be notified by the Credit Guarantee Fund Trust for Micro and Small Enterprises, followed by a pilot phase before broader integration into the export promotion framework.
Both interventions will be implemented on a pilot basis with continuous monitoring and data-driven adjustments. Officials indicated that the phased approach is intended to allow for course correction based on uptake, sectoral response and feedback from exporters and lenders, before scaling up the measures more widely.
The launch of these schemes forms part of the broader Export Promotion Mission, a flagship initiative approved by the Union Cabinet on 12 November 2025, with a total outlay of ₹25,060 crore for the period from 2025–26 to 2030–31. The Mission seeks to strengthen India’s export competitiveness with a sharp focus on MSMEs, first-time exporters and labour-intensive sectors, while also supporting market diversification and the promotion of value-added exports.
The Export Promotion Mission is jointly implemented by the Department of Commerce, the Ministry of Micro, Small and Medium Enterprises and the Ministry of Finance. It is structured around two integrated sub-schemes: NIRYAT PROTSAHAN, which focuses on enabling access to affordable and diversified trade finance, and NIRYAT DISHA, which addresses non-financial enablers such as market access, branding, regulatory compliance, logistics and trade intelligence. Together, the two pillars are intended to lower the cost of exporting, improve the ease of finance and help Indian MSMEs integrate more deeply into global markets as part of a sustained export-led growth strategy.
– global bihari bureau
