The government on Friday unveiled two major components of its ₹25,060-crore, six-year Export Promotion Mission (EPM), including a long-awaited interest subvention scheme and a collateral guarantee mechanism aimed at easing credit access for MSME exporters.
The first intervention is a revamped interest subvention scheme with a corpus of ₹5,181 crore. Under the scheme, MSME exporters of goods will receive a base interest subvention of 2.75 per cent on pre- and post-shipment rupee export credit extended by eligible lending institutions. The benefit will apply to products listed under a “positive list” covering nearly 75 per cent of India’s total tariff lines.
The scheme also provides for additional incentives for exports to notified under-represented or emerging markets, which will be announced separately, the Commerce and Industry Ministry said.
“Only MSME exporters will be covered under the interest subvention scheme. The subvention rate will be floating and benchmarked against repo rates of comparable economies and India,” said Ajay Bhadoo, Additional Secretary in the Commerce Department.
The annual subvention limit has been capped at ₹50 lakh per exporting firm. The rates will be reviewed twice a year, in March and September.
According to the government, the positive list has been prepared using a transparent, data-driven methodology that prioritises 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.
The new scheme replaces the earlier interest equalisation scheme, which lapsed on December 31, 2024, leaving exporters awaiting relief for over a year.
The second intervention involves the introduction of collateral-free export credit support through a guarantee mechanism in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Under this initiative, guarantee coverage of up to 85 per cent will be provided for micro and small exporters and up to 65 per cent for medium exporters, with a maximum outstanding guaranteed exposure of ₹10 crore per exporter in a financial year.
“The launch of interest support for pre- and post-shipment export credit and the collateral guarantee mechanism marks a decisive step towards addressing two of the biggest challenges faced by MSME exporters—high cost of credit and lack of collateral,” said Federation of Indian Export Organisations (FIEO) President S C Ralhan. “These measures will significantly enhance the competitiveness of Indian MSMEs in global markets.”
However, some exporters expressed disappointment over the extent of support. “Exporters had been seeking a 5 per cent subvention to access funds at globally competitive rates. We hope the subvention for new and emerging markets will be higher. The final impact will also depend on which products have been excluded,” said a Delhi-based exporter.
The Export Promotion Mission, approved by the Union Cabinet on November 12, covers the period from 2025–26 to 2030–31 and comprises 11 components. Earlier this week, the government rolled out the first component—the ₹4,531-crore Market Access Support (MAS) initiative.
Bhadoo had earlier indicated that the government aims to operationalise all 11 components of the EPM by January 31.
