Centre rolls out ₹7,295 crore export finance support package for MSMEs

By Admin

05 Jan, 2026

The Government of India has approved a ₹7,295 crore export finance support package aimed at strengthening exporters’ access to trade finance, with a strong focus on micro, small and medium enterprises (MSMEs). The package will be implemented over a six-year period from 2025 to 2031 under the Niryat Protsahan sub-scheme, according to the commerce ministry. This move is seen as a key step in enhancing India’s export competitiveness and easing long-standing credit challenges faced by MSME exporters.

Overview of the export support package
Out of the total ₹7,295 crore outlay (around $810 million), ₹5,181 crore has been allocated for an interest subvention scheme on export credit, while ₹2,114 crore has been earmarked for collateral support to MSME exporters. Together, these two interventions aim to reduce the cost of borrowing and improve access to bank finance, especially for smaller exporters who often struggle with high interest rates and collateral requirements.

Interest subvention on export credit
The first intervention offers interest subvention on eligible rupee-denominated pre-shipment and post-shipment export credit extended by approved lending institutions. A base interest subvention rate of 2.75 percent has been announced. In addition, there is a provision for extra incentive on exports to notified under-represented or emerging markets, subject to operational readiness.

The benefit will apply only to exports covered under a notified positive list of tariff lines at the six-digit Harmonised System (HS) level. This positive list covers about 75 percent of India’s tariff lines and focuses on sectors with high MSME participation. For the financial year 2025–26, an exporter-wise annual cap of ₹50 lakh per firm has been set to ensure wider coverage.

The commerce ministry stated that interest subvention rates will be reviewed twice a year, in March and September, based on domestic and global benchmarks. The positive list has been prepared using a data-driven approach, prioritising labour-intensive and capital-intensive sectors, MSME concentration, and value addition. Restricted and prohibited items, waste and scrap, and products already covered under overlapping incentive schemes have been excluded. At the same time, defence and SCOMET-notified products have been included to support strategic exports.

Operational guidelines for this interest subvention scheme will be issued by the Reserve Bank of India, and the intervention will initially be rolled out on a pilot basis.

Collateral support for MSME exporters
The second intervention focuses on collateral support for export credit, with the objective of improving MSME exporters’ access to bank finance. This measure will be implemented in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

Under the scheme, guarantee coverage of up to 85 percent will be provided for micro and small exporters, while medium exporters will receive coverage of up to 65 percent. The maximum outstanding guaranteed exposure has been capped at ₹10 crore per exporter in a financial year. According to the ministry, this support is designed to complement existing credit guarantee mechanisms and encourage banks to increase lending to export-oriented MSMEs.

Detailed guidelines for the collateral support scheme will be notified by CGTMSE, followed by a pilot rollout.

Impact on India’s export ecosystem
Both interventions will be closely monitored and refined over time as part of a broader overhaul of India’s export promotion framework. By lowering financing costs and easing collateral constraints, the ₹7,295 crore package is expected to boost MSME participation in exports, support diversification into new markets, and strengthen India’s overall export ecosystem in the coming years.