India Strengthens MSME Exports with ‘Niryat Protsahan’ Trade Finance Initiatives

New Delhi, Jan 2026 : The industry has welcomed two major initiatives under the ‘Niryat Protsahan’ sub-scheme, aimed at boosting MSME exports by making trade finance more affordable and accessible. These interventions are expected to lower the cost of exporting, expand financing options, diversify export markets, and strengthen India’s global export brand.

The Federation of Indian Export Organisations (FIEO) lauded the launch, highlighting that the measures will directly address key challenges faced by MSME exporters, particularly the high cost of credit and lack of collateral. “The introduction of interest support for pre- and post-shipment export credit and the collateral guarantee mechanism marks a decisive step in enhancing the competitiveness of Indian MSMEs globally,” said SC Ralhan, President, FIEO.

The first intervention provides interest subvention on pre- and post-shipment rupee export credit extended by eligible lending institutions. A base interest subvention of 2.75 per cent has been announced, with additional incentives for exports to under-represented or emerging markets, contingent on operational readiness.

The subvention applies to exports under a positive list of tariff lines at the HS six-digit level, covering nearly 75 per cent of India’s tariff lines and focusing on sectors with high MSME participation. To ensure targeted support, a maximum exporter-wise annual cap of Rs 50 lakh per Importer Exporter Code (IEC) has been prescribed for FY2025–26, with rates scheduled for bi-annual review in March and September.

Ralhan emphasized that the data-driven positive list, prioritizing labour-intensive sectors, MSME concentration, and value addition, will ensure benefits reach genuine exporters. He added that including defence and SCOMET products would support strategic and high-technology exports.

The second intervention introduces a collateral guarantee support mechanism in partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This framework provides guarantee coverage of up to 85 per cent for Micro and Small exporters and 65 per cent for medium exporters, with a maximum guaranteed exposure of Rs 10 crore per exporter per financial year.

This measure is designed to encourage banks to extend more credit to export-oriented MSMEs, addressing a longstanding concern of small exporters who face challenges meeting collateral requirements, Ralhan said. The scheme complements existing credit guarantee frameworks and is expected to significantly enhance export financing access.

Both interventions will initially be implemented on a pilot basis, with continuous monitoring and refinements informed by feedback and data analysis. Detailed operational guidelines will be issued by the Reserve Bank of India for interest subvention and by CGTMSE for the collateral guarantee scheme.

The broader Export Promotion Mission (EPM) has a total outlay of Rs 25,060 crore for the period FY 2025–26 to FY 2030–31, highlighting the government’s long-term commitment to strengthening India’s export ecosystem, especially for MSMEs.

These measures are expected to make Indian exports more competitive internationally, support strategic sectors, and provide critical financial backing to micro, small, and medium enterprises, enabling them to tap into new and emerging markets while consolidating their presence in traditional markets.

Team Maverick