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The Government of India has approved a ₹7,295–₹7,300 crore export finance support package under the Export Promotion Mission (EPM) to help MSME exporters access cheaper export credit, reduce borrowing costs, and improve global competitiveness.
The package includes:
- a dedicated interest subsidy scheme for exporter (2.75% interest support on export credit), and
- a credit guarantee / collateral support mechanism to ease access to working capital loans.
These details are based on notifications and coverage from:
- Press Information Bureau (Government of India)
- Ministry of Commerce & Industry / DGFT announcements
- Business Standard, Economic Times & reputed business media reports
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Interest Subsidy Scheme for Exporter — What the New Scheme Provides
### 🏷️ What is the Interest Subsidy Scheme for Exporter?
Under the new initiative, MSME exporters will receive:
- 2.75% interest subsidy on
- pre-shipment export credit
- post-shipment rupee export credit
- Subsidy applicable through eligible banks & lending institutions
- Annual benefit cap per exporter (IEC wise)
- Support targeted specifically at MSME exporters
The scheme is being implemented for FY 2025–26 to 2030–31 under the Export Promotion Mission framework.
This makes export working capital cheaper and more accessible for small exporters who typically face higher borrowing rates than large exporters.
Why the Interest Subsidy Scheme for Exporter Matters for MSMEs
Access to affordable working capital is one of the biggest challenges faced by MSME exporters.
Most small exporters borrow at:
- 9% – 12% (or higher) interest on export credit
Higher borrowing costs:
- reduce export margins
- make Indian MSME products less price-competitive
- discourage small units from entering global markets
The interest subsidy scheme for exporter helps by:
✔ lowering effective borrowing cost
✔ improving cash-flow during export cycles
✔ reducing financing burden on small firms
✔ encouraging more MSMEs to start exporting
✔ supporting diversification of export markets
In simple terms — cheaper export finance = stronger MSME export competitiveness.
Is This a New Interest Subsidy Scheme or an Improved Version of Earlier Schemes?
A key question many exporters have asked:
Is this interest subsidy scheme for exporter completely new — or a modified version of earlier schemes?
Here is the clarification.
🟡 Earlier Scheme: Interest Equalisation Scheme (IES)
The earlier Interest Equalisation Scheme (IES):
- provided interest relief on export credit for select sectors
- operated for several years with periodic extensions
- eventually expired in December 2024
After its expiry, exporters — especially MSMEs — were seeking a revised support mechanism.
🟢 Current Scheme: A Revamped & MSME-Focused Interest Subsidy Scheme
The new program under Export Promotion Mission is:
👉 a redesigned and upgraded export credit support scheme
It is:
- more sharply targeted at MSME exporters
- implemented with clearer eligibility norms
- supported by credit guarantee + interest subsidy together
- aimed at long-term export competitiveness
So, it is not just a continuation, but a revamped, modernized version inspired by earlier models while adding:
- wider coverage for MSMEs
- improved implementation structure
- stronger focus on credit accessibility
In short:
The new interest subsidy scheme for exporter builds on earlier export credit support programs — but functions as an improved, MSME-centric version under the Export Promotion Mission.
Credit Guarantee Support Alongside Interest Subsidy
Along with interest subsidy, the package also includes:
- a separate credit guarantee / collateral support pool
- designed to help MSME exporters secure loans without heavy collateral conditions
This reduces lender risk and improves approval rates for export loans — especially for new or first-time exporters.
❓ FAQ — Interest Subsidy Scheme for Exporter
Q1. Who is eligible under the interest subsidy scheme for exporter?
MSME exporters with:
- valid Import-Export Code (IEC)
- eligible pre-shipment or post-shipment export credit
benefit as per notified product categories and guidelines.
Q2. What interest benefit do exporters receive?
Exporters receive:
- 2.75% interest subsidy on eligible rupee export credit
subject to annual benefit limits and bank-level verification.
Q3. Which types of export credit are covered?
- Pre-shipment export credit
- Post-shipment rupee export credit
sanctioned through eligible banks and lending institutions.
Q4. Is this scheme different from the earlier Interest Equalisation Scheme?
Yes.
The current interest subsidy scheme for exporter is:
- revamped
- more MSME-focused
- implemented under the Export Promotion Mission
while earlier IES had broader sectoral coverage but is now discontinued.
Q5. How long will the scheme be implemented?
The scheme is planned over a six-year implementation window (FY 2025–31) as per notified program framework.
👤 About the Author
This article has been prepared by Tabrez Khan , a entrepreneur, exporter ,writer who covers MSME policy, export finance, government schemes, and small business reforms in India — with a focus on simplifying policy updates for entrepreneurs and exporters.
⚠️ Disclaimer
This post is for informational and educational purposes only.
It is based on government notifications and credible business media sources available at the time of writing. Exporters should refer to official scheme guidelines, circulars, and bank advisories before making financial or business decisions.
📍 References & Clickable Sources
- Govt press release on interest subvention for export credit (PIB) — Govt launches interest subvention for pre & post shipment export credit
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2210874 Press Information Bureau - Export package announced — Economic Times — Govt announces ₹7,295-cr export credit support to improve exporters’ access to credit
https://economictimes.indiatimes.com/news/economy/foreign-trade/government-announces-rs-7295-cr-export-package-to-improve-exporters-access-to-credit/articleshow/126305821.cms The Economic Times - Interest subvention scheme details — Moneycontrol — Govt rolls out subvention scheme guidelines for MSME exporters
https://www.moneycontrol.com/news/economy/policy/govt-rolls-out-interest-subvention-scheme-guidelines-for-msme-exporters-worth-rs-5-181-crore-13754820.html Moneycontrol - Export Promotion Mission overview — IBEF — Export Promotion Mission: Overview and schemes
https://www.ibef.org/economy/Export-Promotion-Mission
