MSME Exports Get Boost with Two New Trade Finance Measures
The first intervention introduces interest support for pre- and post-shipment export credit to reduce borrowing costs and ease working-capital constraints for MSME exporters. A base interest subvention of 2.75 per cent will be provided on eligible rupee export credit, with a provision for additional incentives for exports to notified under-represented or emerging markets, subject to operational readiness.
This benefit will apply only to exports covered under a notified positive list of Harmonised System six-digit tariff lines, accounting for around 75 per cent of India’s tariff lines with high MSME participation. An exporter-wise annual cap of Rs 5 million per Importer Exporter Code has been prescribed for FY 2025–26, with rates to be reviewed bi-annually in March and September. Detailed operational guidelines will be issued by the Reserve Bank of India, and the scheme will be implemented initially on a pilot basis.
The second intervention focuses on collateral support for export credit to address financing constraints faced by MSMEs. Under this measure, a collateral guarantee for export credit is being introduced in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises. 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 100 million per exporter per financial year.
The two measures will be implemented on a pilot basis with continuous monitoring and data-driven refinements. Through the Export Promotion Mission, jointly implemented by the Department of Commerce, the Ministry of MSME and the Ministry of Finance, the government aims to lower export costs, expand access to finance, diversify markets and strengthen India’s export competitiveness, particularly for MSMEs.