Cabinet Clears Credit Guarantee Scheme for Exporters
ECONOMY & POLICY

Cabinet Clears Credit Guarantee Scheme for Exporters

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the introduction of the Credit Guarantee Scheme for Exporters (CGSE), which will provide 100 per cent credit guarantee coverage via the National Credit Guarantee Trustee Company Limited (NCGTC). The scheme will allow Member Lending Institutions (MLIs) to extend additional credit of up to Rs 200 billion to eligible exporters, including MSMEs.

Implementation Strategy

The Department of Financial Services (DFS) will implement CGSE through NCGTC. A Management Committee chaired by the DFS Secretary will oversee execution and progress. The scheme is designed to boost access to collateral-free credit and strengthen liquidity for exporters.

Expected Impact

CGSE is expected to improve the global competitiveness of Indian exporters, particularly MSMEs, and support market diversification. By easing access to credit, the scheme reinforces India’s goal of achieving USD 1 trillion in exports and advances the country’s Aatmanirbhar Bharat mission.

Background

Exports account for nearly 21 per cent of India’s GDP in FY 2024–25 and play a critical role in maintaining foreign exchange reserves. Export-oriented industries employ more than 45 million people, with MSMEs contributing about 45 per cent of total exports. Sustained export growth is essential for India’s current account balance and overall macroeconomic stability.

The government noted that exporters need enhanced liquidity and adequate time to expand into new markets and improve competitiveness. The CGSE aims to provide this support by ensuring additional financial assistance, thereby promoting business stability, growth, and expansion across global markets.

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the introduction of the Credit Guarantee Scheme for Exporters (CGSE), which will provide 100 per cent credit guarantee coverage via the National Credit Guarantee Trustee Company Limited (NCGTC). The scheme will allow Member Lending Institutions (MLIs) to extend additional credit of up to Rs 200 billion to eligible exporters, including MSMEs. Implementation Strategy The Department of Financial Services (DFS) will implement CGSE through NCGTC. A Management Committee chaired by the DFS Secretary will oversee execution and progress. The scheme is designed to boost access to collateral-free credit and strengthen liquidity for exporters. Expected Impact CGSE is expected to improve the global competitiveness of Indian exporters, particularly MSMEs, and support market diversification. By easing access to credit, the scheme reinforces India’s goal of achieving USD 1 trillion in exports and advances the country’s Aatmanirbhar Bharat mission. Background Exports account for nearly 21 per cent of India’s GDP in FY 2024–25 and play a critical role in maintaining foreign exchange reserves. Export-oriented industries employ more than 45 million people, with MSMEs contributing about 45 per cent of total exports. Sustained export growth is essential for India’s current account balance and overall macroeconomic stability. The government noted that exporters need enhanced liquidity and adequate time to expand into new markets and improve competitiveness. The CGSE aims to provide this support by ensuring additional financial assistance, thereby promoting business stability, growth, and expansion across global markets.

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