Export Promotion Mission: India Launches Two More Sub-Schemes To Make Trade Finance Faster, Cheaper
One of the sub-schemes is aimed at enabling MSME exporters to access export credit at competitive and below-market interest rates.
The government on Friday announced the launch of two more components of Export Promotion Mission with a total value of Rs 7,295 crore, which are aimed at making trade financing faster and cheaper.
The first intervention valued at Rs 5,181 crore relates to interest subvention for pre and post-shipment export credit, aimed at reducing the cost of export credit and easing working-capital constraints faced by MSME exporters.
Under this intervention, interest subvention will be provided on pre- and post-shipment rupee export credit extended by eligible lending institutions.
The subvention will be benchmarked against repo rates of comparable economies and India, and will apply to both pre-shipment and post-shipment rupee export credit.
The budgetary outlay of Rs 5,181 will be valid over six years till fiscal year 2031. The interest subvention will be applicable only to exports covered under a notified positive list of tariff lines, which cover about 75% of the country's overall tariff lines.
All eligible medium, small and micro exporters will receive 2.75% interest subvention. Further, MSMEs exporting to new and emerging markets will receive additional incentives. Benefits have been capped at Rs 50 lakh per exporting firm.
The second sub-scheme under Niryat Protsahan, valued at Rs 2,114 crore, includes collateral support for export credit, aimed at addressing collateral constraints faced by MSME exporters and improving access to bank finance.
Under this intervention, a collateral guarantee support for export credit is being introduced in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
Guarantee coverage of up to 85% will be provided for micro and small exporters and up to 65% for medium exporters, with a maximum outstanding guaranteed exposure of Rs 10 crore per exporter in a financial year.
The Ministry of Commerce, in a release, said the positive list has been prepared using a data-driven methodology, focusing on labour-intensive and capital-intensive sectors, MSME concentration and value addition, while excluding restricted and prohibited items, waste and scrap, and products covered under overlapping incentive schemes.
Defence and SCOMET-notified products have been included to support strategic exports. Detailed operational guidelines for this intervention will be issued by the Reserve Bank of India. A pilot rollout will be undertaken, with scope for refinement based on implementation feedback.
