In a major boost to export-oriented Micro, Small and Medium Enterprises (MSMEs), the government on January 30 rolled out interest subvention schemes worth ₹7,295 crore, aimed at improving access to affordable export credit and enhancing global competitiveness of Indian exporters.
The schemes are designed to ease financing costs for MSME exporters by providing targeted interest relief on export credit during both pre-shipment and post-shipment stages.
2.75% Interest Subvention for Export Credit
Under the newly announced support measures, eligible MSME exporters will receive 2.75 per cent interest subvention on pre-shipment and post-shipment export credit. The benefit will be available on export loans extended by scheduled commercial banks and other notified financial institutions.
The interest subvention aims to reduce the cost of borrowing for MSME exporters, improve liquidity, and enable smoother execution of export orders, especially amid fluctuating global demand and tight credit conditions.
Focus on MSME Export Competitiveness
Government officials stated that the scheme specifically targets MSMEs, which account for a significant share of Bharat’s merchandise and services exports. High financing costs have often limited the ability of small exporters to compete with global peers, making interest relief a critical intervention.
By lowering effective interest rates, the scheme is expected to support working capital requirements, improve cash flow management, and encourage MSMEs to explore new export markets.
Support Across Pre-Shipment and Post-Shipment Phases
The interest subvention will cover:
- Pre-shipment credit, supporting raw material procurement, production, and packaging before goods are shipped
- Post-shipment credit, enabling exporters to manage receivables and operational expenses until export proceeds are realised
This end-to-end credit support is expected to provide stability to MSME exporters throughout the export cycle.
Part of Broader Export Promotion Strategy
The ₹7,295 crore allocation forms part of the government’s broader strategy to strengthen export growth, improve ease of doing business, and support labour-intensive sectors. Economists note that export-linked MSMEs generate substantial employment and have a strong multiplier effect on the economy.
The scheme is also aligned with efforts to enhance manufacturing competitiveness, promote value addition, and integrate MSMEs more deeply into global supply chains.
Boost to Jobs and Foreign Exchange Earnings
By improving access to affordable export credit, the interest subvention scheme is expected to:
- Encourage higher export volumes
- Support employment generation in MSME-driven sectors
- Strengthen foreign exchange earnings
- Improve the long-term sustainability of small exporters
🔑 Key Scheme Highlights
- ₹7,295 crore allocated for export support schemes
- 2.75% interest subvention on pre- and post-shipment export credit
- Scheme targeted at MSME exporters
- Aims to reduce borrowing costs and boost export competitiveness
