New Delhi, Jan 3 (NationPress) The industry has positively received two essential interventions under the 'Niryat Protsahan' sub-scheme that are designed to bolster MSME exports by facilitating affordable and more accessible trade finance. This initiative is expected to reduce export costs, broaden financial access, diversify export markets, and reinforce India's export reputation.

The Federation of Indian Export Organisations (FIEO) has expressed support for the introduction of these two significant measures aimed at enhancing MSME exports and improving access to economical trade financing.

“The introduction of interest support for both pre- and post-shipment export credit, along with a collateral guarantee mechanism, represents a crucial advancement in tackling two of the primary hurdles faced by MSME exporters: the high cost of credit and insufficient collateral. These initiatives will significantly boost the competitiveness of Indian MSMEs in global markets,” stated SC Ralhan, President of FIEO.

The first initiative offers interest subvention on pre- and post-shipment export credit provided by qualifying lending institutions.

A base interest subvention of 2.75 percent has been announced, with additional incentives for exports directed toward under-represented or emerging markets, subject to operational readiness.

This interest support will be applicable to exports listed under a designated positive list of tariff lines at the Harmonised System (HS) six-digit level, covering nearly 75 percent of India’s tariff lines, which reflects sectors with significant MSME involvement.

For the fiscal year 2025–26, an annual cap of Rs 50 lakh per Importer Exporter Code (IEC) has been established, with rates to be assessed bi-annually in March and September.

Ralhan noted that the data-driven positive list, focusing on labour-intensive sectors, MSME concentration, and value addition, will ensure that genuine exporters benefit. The inclusion of defence and SCOMET products will also enhance support for strategic and high-technology exports.

The second intervention introduces collateral guarantee support for export credit in collaboration with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

This mechanism will provide guarantee coverage of up to 85 percent for Micro and Small exporters and up to 65 percent for medium exporters, with a maximum guaranteed exposure of Rs 10 crore per exporter annually.

This collateral guarantee framework is poised to encourage banks to increase lending to export-oriented MSMEs and to complement existing credit guarantee initiatives. It has been a long-standing request from the exporting community, especially small exporters who face challenges in meeting collateral demands, according to the FIEO chief.

Both interventions will initially be rolled out on a pilot basis, with ongoing monitoring and adjustments based on feedback and data analysis.

Detailed operational guidelines will be published by the Reserve Bank of India for the interest subvention and by CGTMSE for the collateral guarantee scheme.

The Export Promotion Mission (EPM) has a total budget of Rs 25,060 crore for the period from FY 2025–26 to FY 2030–31.