The Federation of Indian Export Organisations (FIEO) welcomed the launch of two critical interventions, aimed at strengthening MSME exports and significantly improving access to affordable trade finance.
“The launch of interest support for pre- and post-shipment export credit and the collateral guarantee mechanism marks a decisive step towards addressing two of the biggest challenges faced by MSME exporters—high cost of credit and lack of collateral. These measures will greatly enhance the competitiveness of Indian MSMEs in global markets,” said SC Ralhan, President, FIEO.
The first intervention provides interest subvention on pre- and post-shipment rupee export credit extended by eligible lending institutions.
A base interest subvention of 2.75 per cent has been announced, with a provision for additional incentives for exports to notified under-represented or emerging markets, subject to operational readiness.
The interest support will apply to exports under a notified positive list of tariff lines at the Harmonised System (HS) six-digit level, covering nearly 75 per cent of India’s tariff lines, reflecting sectors with high MSME participation.
An exporter-wise annual cap of Rs 50 lakh per Importer Exporter Code (IEC) has been prescribed for FY2025–26, with rates to be reviewed bi-annually in March and September.
Ralhan said that the data-driven positive list, with its focus on labour-intensive sectors, MSME concentration and value addition, will ensure that benefits reach genuine exporters. Inclusion of defence and SCOMET products will also support strategic and high-technology exports.
The second intervention introduces collateral guarantee support for export credit in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
Under this mechanism, guarantee coverage of up to 85 per cent will be available for Micro and Small exporters and up to 65 per cent for medium exporters, with a maximum guaranteed exposure of Rs 10 crore per exporter per financial year.
This collateral guarantee framework will encourage banks to increase lending to export-oriented MSMEs and complement existing credit guarantee schemes. It is a long-standing demand of the exporting community, particularly small exporters who struggle to meet collateral requirements, said the FIEO chief.
Both interventions will be implemented initially on a pilot basis, with continuous monitoring and refinements based on feedback and data analysis.
Detailed operational guidelines will be issued by the Reserve Bank of India for interest subvention and by CGTMSE for the collateral guarantee scheme.
The Export Promotion Mission (EPM) has a total outlay of Rs 25,060 crore for the period FY 2025–26 to FY 2030–31.
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