The Indian government has announced a substantial export support package worth Rs 7,295 crore, aimed at enhancing credit access for exporters. This initiative includes a Rs 5,181 crore interest subvention scheme and a Rs 2,114 crore collateral support measure. Both programs are set to be implemented over a six-year period, from 2025 to 2031, as part of the broader Rs 25,060 crore Export Promotion Mission approved by the Cabinet in November 2025. Officials emphasize the importance of these measures in addressing the trade finance challenges faced by exporters amid global trade pressures.
Details of the Interest Subvention Scheme
The newly introduced interest subvention scheme is designed to provide financial relief to exporters by offering subsidy support on both pre-shipment and post-shipment export credit. This initiative aims to help exporters from specific sectors secure rupee export credit at competitive interest rates. Eligible micro, small, and medium enterprises (MSMEs) can benefit from an interest subvention starting at 2.75 percent, with an annual cap of Rs 50 lakh per firm. The Commerce Ministry has mentioned that the subvention rates will be reviewed biannually, in March and September, to align with domestic and global benchmarks. The Reserve Bank of India will collaborate with the Directorate General of Foreign Trade (DGFT) to implement the scheme, with detailed guidelines to be released soon. A pilot rollout will precede full implementation, allowing for adjustments based on feedback.
Collateral Support for Export Credit
In addition to the interest subvention, the government has introduced a collateral support scheme worth Rs 2,114 crore. This program aims to provide credit guarantee cover for export-linked working capital loans specifically targeted at MSMEs. Under this scheme, firms can access collateral guarantees of up to Rs 10 crore. The coverage will be generous, offering up to 85 percent for micro and small exporters and 65 percent for medium exporters. This initiative is expected to enhance the lending capabilities of banks toward export-oriented MSMEs, facilitating their growth and competitiveness in the global market.
Eligibility and Product Restrictions
Both the interest subvention and collateral support schemes will apply exclusively to exports from a designated positive list of products. Items related to defense and SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) are included in this list. However, certain categories are excluded, such as restricted products, waste and scrap, and goods that fall under the production-linked incentive (PLI) schemes. The DGFT has clarified that these measures are designed to complement existing credit guarantee mechanisms, further strengthening the financial framework for exporters.
Implementation and Future Outlook
The introduction of this export support package is a strategic move to bolster bank lending to export-oriented MSMEs. The Commerce Ministry has indicated that the guidelines for the collateral support scheme will be issued by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Following this, a pilot phase will be initiated, leading to a comprehensive integration into the broader export promotion framework. This initiative reflects the government’s commitment to enhancing the competitiveness of Indian exporters on the global stage, particularly during challenging economic times.
Digihunt is not a financial advisor and this is not investment advice.