The Indian government has rolled out two major financial interventions under its Export Promotion Mission to strengthen exports from micro, small and medium enterprises (MSMEs) and improve access to trade finance. Announced as part of the mission’s initial implementation, the measures combine an interest subsidy on export loans with a linked guarantee facility to ease working capital constraints and encourage bank lending.
Export Promotion Mission India new finance measures for MSMEs
The first intervention provides an interest subsidy on export loans extended by eligible lending institutions. The scheme offers a base subsidy of 2.75% on interest for rupee-denominated export finance provided both before and after shipments. Additional incentives are available for exports to notified under-represented or emerging markets, subject to operational readiness.
The subsidy will apply only to exports listed in a positive list prepared at the six-digit tariff line level, covering roughly 75% of India’s tariff lines and reflecting products with high MSME participation. The scheme excludes restricted or prohibited goods, waste and scrap, and items that already fall under overlapping incentive programmes. Defence and other strategically notified products have been included to support strategic export objectives.
An exporter-wise annual limit has been set at ₹50 lakh per Importer-Exporter Code (IEC) for the fiscal year 2025-26. Rates and coverage will be reviewed biannually in March and September to align with domestic and global conditions. The Reserve Bank of India will issue detailed operational guidelines and the measures will begin with a pilot phase to gather implementation feedback.
The second intervention establishes linked guarantee support for export loans through a partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Under the arrangement, micro and small exporters will receive guarantee coverage up to 85% while medium exporters will be eligible for up to 65% coverage. The guaranteed amount per exporter is capped at ₹10 crore in a financial year.
This guarantee facility is designed to complement existing loan guarantee mechanisms and to incentivise banks to extend more credit to export-oriented MSMEs. Detailed terms and guidelines will be issued by CGTMSE, with a pilot phase planned before broader integration into the export incentive architecture.
Both interventions will operate on a pilot basis with continuous monitoring and data-driven adjustments. The wider Export Promotion Mission seeks to reduce export costs, broaden market access, and strengthen India’s export brand. It also aims to diversify export markets and deepen MSME participation in global value chains, contributing to sustained export-led growth.
The mission was approved by the Union Cabinet on 12 November 2025 and is funded with a budget allocation of ₹25,060 crore for the period from fiscal year 2025-26 through 2030-31. The programme is jointly implemented by the Department of Commerce, the Ministry of Micro, Small and Medium Enterprises, and the Ministry of Finance, and rests on two integrated sub-schemes: export incentives for affordable and diversified trade finance, and export direction for non-financial support such as market access, branding, regulatory compliance and logistics.
Officials say the twin measures are intended to reduce the cost of exporting for small businesses, expand their access to bank finance, and help Indian exporters, especially MSMEs, to compete more effectively in international markets.
Key Takeaways:
- Government launches interest subsidy and guarantee schemes to lower export finance costs for MSMEs.
- Export Promotion Mission India introduces a 2.75% base interest subsidy and CGTMSE-linked guarantees up to ₹10 crore per exporter.
- Measures will be piloted, target tariff lines with high MSME participation, and include regular six-month reviews.
