India launches interest subvention and credit guarantees to help MSMEs cut costs and access global export markets.
The Indian Ministry of Commerce and Industry has introduced two major initiatives under the NIRYAT PROTSAHAN scheme to bolster exports from micro, small, and medium-sized enterprises (MSMEs). These measures, part of the national Export Promotion Mission, focus on reducing borrowing costs and addressing collateral challenges for smaller businesses.
The first initiative provides interest support for both pre-shipment and post-shipment rupee export credit. This is designed to alleviate capital constraints for exporters by lowering the cost of loans. Eligible firms will receive a base interest subsidy of 2.75 per cent. Additional incentives may be offered for trade with specific emerging or under-represented international markets.
This support applies to a specific list of products covering roughly 75 per cent of India’s tariff lines, prioritising sectors with high MSME involvement and labour-intensive production. For the 2025–26 financial year, an annual subsidy limit of ₹50 lakh per Importer Exporter Code has been set. The Reserve Bank of India is expected to release detailed operational procedures following this announcement.
The second intervention addresses the difficulty MSMEs face when providing security for bank loans. In partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), the government is offering significant guarantee coverage on export credit.
Micro and small exporters can access coverage for up to 85 per cent of their credit, while medium-sized enterprises are eligible for up to 65 per cent. The maximum guaranteed exposure is capped at ₹10 crore per exporter annually. This move intends to encourage banks to increase lending to the export sector by reducing the risk associated with unsecured credit.
These interventions are part of the broader Export Promotion Mission, which was approved by the Union Cabinet on 12 November 2025. With a total budget of ₹25,060 crore allocated until 2031, the mission is a collaborative effort between the Department of Commerce and the ministries of MSME and Finance.
The framework is divided into two parts: NIRYAT PROTSAHAN, which manages financial assistance, and NIRYAT DISHA, which handles non-financial support such as branding, logistics, and regulatory compliance. By integrating these schemes, the government aims to help Indian businesses become more competitive in global value chains and drive long-term economic growth.
SOURCE – PIB
