India Launches 2 Key EPM Interventions to Strengthen Exports by MSMEs

Introduction: India's Ministry of Commerce and Industry has taken a significant step forward in empowering micro, small, and medium enterprises (MSMEs) by launching two transformative interventions under the 'Niryat Protsahan' sub-scheme of the Export Promotion Mission (EPM). These initiatives are designed to address the most pressing challenges faced by MSME exporters—high financing costs and limited access to collateral-free credit. If you're an exporter or someone interested in India's trade policy, understanding these changes could open new doors for growth and global competitiveness.

Understanding the Interest Subvention for Export Credit

The first intervention focuses on reducing the financial burden on exporters through interest subvention on pre- and post-shipment rupee export credit. Under this scheme, MSME exporters will receive a base interest subvention of 2.75%, with additional incentives available for exports to emerging or under-represented markets. This applies to approximately 75% of India's tariff lines, covering a carefully curated positive list that prioritizes labour-intensive sectors, high value-addition products, and MSME-concentrated industries. With an annual cap of ₹5 million per Importer Exporter Code (IEC) for FY 2025-26, this intervention directly tackles working capital constraints, making it easier and more affordable for MSMEs to compete globally. According to the Ministry of Commerce and Industry, such measures are crucial for integrating Indian exporters into global value chains and driving sustained export-led growth.

Collateral Support Through CGTMSE Partnership

The second intervention addresses one of the biggest roadblocks for MSME exporters—the lack of collateral. In partnership with the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), the government is introducing guarantee coverage of up to 85% for micro and small exporters and 65% for medium exporters. With a maximum outstanding guaranteed exposure of ₹100 million per exporter annually, this scheme significantly reduces the risk for banks, encouraging them to extend credit to export-oriented MSMEs without demanding traditional collateral. This is a game-changer for thousands of small businesses that have the potential to export but have been held back by stringent banking requirements. For more insights on how credit guarantee schemes support SMEs, check out resources from CGTMSE.

Why These Interventions Matter for India's Export Growth

These two interventions represent more than just policy announcements—they're strategic moves to transform India's export landscape. By lowering financing costs and removing collateral barriers, the Export Promotion Mission is enabling MSMEs to scale operations, explore new markets, and contribute meaningfully to India's economic growth. The focus on labour-intensive sectors and value-added products ensures that the benefits reach those who need them most while creating employment opportunities across the country. As India aims to diversify its export markets and strengthen its global brand, these pilot initiatives will undergo continuous monitoring and data-driven refinements, setting the stage for a comprehensive overhaul of export promotion frameworks.

Conclusion

India's launch of interest subvention and collateral support under the Export Promotion Mission marks a pivotal moment for MSME exporters. These interventions directly address the twin challenges of high financing costs and limited credit access, empowering small businesses to compete on the global stage. With transparent implementation, regular reviews, and a focus on priority sectors, the government is laying a strong foundation for export-led growth. For MSME exporters, now is the time to leverage these schemes, strengthen your export capabilities, and tap into emerging international markets. The future of Indian exports looks brighter than ever—are you ready to be part of this transformation?