India has removed the growth penalty clause under its export credit scheme, a move aimed at easing financing constraints and improving credit availability for exporters, especially MSMEs.
The change allows exporters to access concessional export credit even if they fail to achieve prescribed export growth targets, addressing concerns that the earlier rule discouraged participation during periods of weak global demand. Banks have been advised to ensure smoother and wider credit flow under the revised framework.
The decision is expected to provide relief to labour-intensive sectors and support export competitiveness by lowering borrowing costs and reducing compliance pressure, as India looks to sustain export momentum amid global trade uncertainties.