India's Export Boost: MSMEs Get New Support

India is set to launch a comprehensive Export Promotion Mission, a five-year initiative through FY31, designed to bolster its exporters amid increasing global trade pressures. The mission focuses on providing crucial financial support to Micro, Small, and Medium Enterprises (MSMEs) to enhance their competitiveness in the international market. Key components include interest subvention on export credit, aiming to reduce borrowing costs for businesses engaged in both pre- and post-shipment financing.

The Niryat Protsahan Yojana, a sub-scheme within the mission, will offer a range of trade finance instruments. These include affordable trade finance, export factoring, collateral guarantees, and credit enhancement support for market diversification. Notably, the interest subvention benefit will be capped at approximately ₹50 lakh per exporter, with a potential focus on micro and small enterprises over medium ones. Specific guidelines for this support are expected within a month.

This new mission replaces the earlier Interest Equalisation Scheme, which provided a 3% subsidy since 2015. The government aims to prioritize sectors significantly impacted by recent global tariff escalations, such as textiles, leather, gems and jewellery, and engineering goods. This strategic move is intended to counteract recent declines in India's goods exports, driven partly by external factors like US tariffs.