The Indian government has launched two policy measures under Export Promotion Mission (EPM) to empower MSME exports and increase access to trade finance.
"A base interest subvention of 2.75 per cent has been provided, with a provision for additional incentive for exports to notified under-represented or emerging markets, subject to operational readiness," an official statement from Ministry of Commerce and Industry said.
Interest Subvention to Cover 75% of Tariff Lines
The interest subvention will be applicable only to exports covered under a notified positive list of tariff lines at the Harmonised System six-digit level, covering approximately about 75 per cent of India’s tariff lines and reflecting high MSME participation. An exporter-wise annual cap of Rs 50 lakh per Importer Exporter Code (IEC) has been prescribed for the financial year 2025–26.
The applicable rates will be reviewed bi-annually in March and September, taking into account domestic and global benchmarks.
The Commerce Ministry noted that the positive list has been prepared using a transparent and data-driven methodology, prioritising labour-intensive and capital-intensive sectors, MSME concentration and value addition. Restricted and prohibited items, waste and scrap, and products covered under overlapping incentive schemes have been kept out of the scheme.
RBI to Issue Operation Guidelines
Detailed operational guidelines for this intervention will be issued by the Reserve Bank of India (RBI). A pilot of the scheme will be rolled out with scope for refinement based on implementation feedback.
Collateral Guarantee For Export Credit
The second scheme unveiled under EPM attempts to address collateral constraints faced by MSME exporters and improving access to bank finance.
Under this intervention, a collateral guarantee support for export credit has been introduced in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
As per the scheme, 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 Rs 10 crore per exporter in a financial year.
This scheme aims to complement existing credit guarantee mechanisms and to increase bank loans to export-oriented MSMEs.
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