The government on Wednesday approved two schemes worth Rs 45,000 crore to help exporters tide over the impact of high tariffs imposed by the US on Indian shipments.
Photograph: Amit Dave/Reuters
The Rs 25,060-crore Export Promotion Mission seeks to strengthen India’s export competitiveness, particularly for MSMEs, first-time exporters, and labour-intensive sectors.
The second scheme — Credit Guarantee Scheme for Exporters (CGSE) — will ensure up to Rs 20,000 crore collateral-free credit support to exporters.
The decisions were taken at the Cabinet meeting chaired by Prime Minister Narendra Modi.
The decisions, announced by I&B Minister Ashwini Vaishnav, comes in the back drop of President Donald Trump administration imposing a hefty 50 per cent tariff on Indian goods effective from August 27.
India and the US are also negotiating a bilateral trade agreement.
The Export Promotion Mission (EPM) will be implemented over six years through two sub-schemes – Niryat Protsahan (Rs 10,401 crore) and Niryat Disha (Rs 14,659 crore).
It is a very comprehensive mission and it will support the complete export ecosystem, Vaishnav told reporters.
Under the mission, priority support will be extended to sectors impacted by recent global tariff escalations, such as textiles, leather, gems and jewellery, engineering goods, and marine products.
These sectors are facing challenges in the US market.
Due to the high import duties, India’s merchandise exports to the US declined by 11.93 per cent to $5.46 billion in September.
Under Niryat Protsahan, focus will be given to improve access to affordable trade finance for MSMEs through a range of instruments such as interest subvention, export factoring, collateral guarantees, credit cards for e-commerce exporters, and credit enhancement support for diversification into new markets.
The government, however, did not disclose the rate of subvention.
Similarly under the Niryat Disha, the funds will be used for non-financial enablers such as assistance for international branding, packaging, and participation in trade fairs, export warehousing and logistics, inland transport reimbursements, and trade intelligence and capacity-building initiatives.
The Credit Guarantee Scheme for Exporters (CGSE) for providing 100 per cent credit guarantee will be implemented by the finance ministry through National Credit Guarantee Trustee Company Limited (NCGTC) to provide additional credit support by lending institutions to the exporters including MSMEs.
A management Committee formed under the chairmanship of secretary, Department of Financial Services (DFS), will oversee the progress and implementation of the scheme.
In a release, the government said the CGSE Scheme is expected to enhance the global competitiveness of Indian exporters and support diversification into new and emerging markets.
Enabling collateral-free credit access under CGSE will strengthen liquidity, ensure smooth business operations, reinforce India’s progress towards achieving the USD 1 trillion export target, the release said.
The Federation of Indian Export Organisations (FIEO) welcomed the approval of the Export Promotion Mission (EPM) saying it marks a major structural reform by consolidating multiple export promotion schemes into a comprehensive, outcome-based, and digitally driven framework.
“The Export Promotion Mission reflects a pragmatic and forward-looking vision for India’s trade sector.
“By bringing together financial and non-financial interventions under a unified framework, the Mission provides much-needed continuity, flexibility, and responsiveness to global trade dynamics,” said S C Ralhan, President, FIEO.
India’s exports grew 6.74 per cent to $36.38 billion in September, while imports jumped 16.6 per cent, widening the trade deficit to $31.15 billion, the highest in over a year.
Cumulatively, during April-September this year, exports increased by 3.02 per cent to $220.12 billion, while imports rose 4.53 per cent to $375.11 billion, leaving a trade deficit of $154.99 billion.
