Cabinet greenlights ₹45,000 cr schemes for export sector

The Union cabinet on Wednesday approved two major initiatives worth a combined ₹45,060 crore to strengthen India’s export ecosystem and ease liquidity pressures for exporters.

The cabinet cleared the launch of the Credit Guarantee Scheme for Exporters (CGSE) and the Export Promotion Mission (EPM), together marking a significant policy boost for Indian exporters, especially MSMEs (micro, small and medium enterprises).

Under the credit guarantee scheme, the National Credit Guarantee Trustee Co. Ltd will provide 100% credit guarantee coverage to banks and financial institutions for extending additional collateral-free loans of up to ₹20,000 crore to eligible exporters, including MSMEs.

The scheme is aimed at easing liquidity constraints, ensuring smooth business operations and enhancing competitiveness as India works toward the $1 trillion export target. A management committee led by the secretary, Department of Financial Services, will oversee implementation and monitor outcomes.

The scheme allows additional working capital of up to 20% of sanctioned export credit limits, valid till 31 March 2026. It provides collateral-free credit backed by a full government guarantee, enabling exporters to expand into new and high-risk markets.

India is facing a 50% tariff imposed by the US, which is the highest among all its trading partners except Brazil. The tariff has been in effect since 27 August.

Briefing the media about Cabinet decisions, Union railway and IT minister Ashwini Vaishnaw said, “The scheme will help exporters diversify into new and emerging markets and strengthen India’s position as a reliable global supplier, reinforcing progress toward an Aatmanirbhar and resilient economy.”

Mint had reported on 8 August that India is preparing to counter stiff US tariffs by pivoting to new markets and offering incentives for exporters.

The Cabinet also approved the Export Promotion Mission with a total outlay of ₹25,060 crore for FY26 to FY31, consolidating fragmented export support schemes into a unified, outcome-driven framework. Anchored by the Department of Commerce, it will make export promotion more inclusive, technology-enabled, and responsive to shifting global trade dynamics.

The EPM will operate through two sub-schemes—Niryat Protsahan, focusing on affordable trade finance access, and Niryat Disha, targeting non-financial enablers such as export quality and compliance support, branding, packaging, logistics, and trade intelligence. It will merge key initiatives like the Interest Equalisation Scheme and Market Access Initiative into a single adaptive system.

The allocation under Niryat Protsahan will be ₹10,400 crore, and for Niryat Disha, ₹14,660 crore. Niryat Protsahan will offer interest subvention on pre- and post-shipment export credit, promote export factoring, deep-tier financing, and collateral support for MSMEs.

It will also introduce export credit cards for e-commerce exporters to help small online sellers access timely credit. Niryat Disha will strengthen testing, certification, branding, packaging, and export warehousing while reimbursing inland transport costs for low-export-intensity districts to reduce logistics costs, the minister said.

The Mission will prioritize sectors affected by recent global tariff hikes—including textiles, leather, gems and jewellery, engineering goods, and marine products—to sustain export orders, protect jobs, and promote market diversification. The Directorate General of Foreign Trade (DGFT) will be the nodal implementing agency, with end-to-end digital processing of applications and disbursals.

As per the union minister, the EPM aims to enhance export readiness through compliance and certification support, improve market access for Indian products, and generate employment across manufacturing, logistics, and allied services.

Together, the two measures signal a coordinated effort by the government to cushion exporters from external trade shocks, cut financing costs, and build a globally competitive export base. The ₹45,060 crore package is expected to improve liquidity, enhance market readiness, and help Indian products gain a stronger foothold amid growing trade protectionism worldwide.

“The Credit Guarantee Scheme is focused on MSMEs and has been launched to cushion the losses being faced by labour-intensive sectors such as textiles, gems and jewellery, leather exports, engineering goods, among others,” Ajay Bhadoo, additional secretary & director general, told Mint on the sidelines of the Cabinet briefing.

“The twin decisions come at a crucial time when exporters, especially MSMEs, are struggling with tightening credit and higher trade costs due to global tariff disruptions. The Credit Guarantee Scheme will help restore confidence among small exporters by unlocking much-needed working capital, while the Export Promotion Mission provides a long-term framework for competitiveness and market diversification. Together, they create a strong safety net and growth platform for India’s export-oriented MSME base,” said Vinod Kumar, president, India SME Forum.

In a separate decision, the Cabinet also approved the rationalization of royalty rates for graphite, caesium, rubidium and zirconium, minerals considered vital for green energy and high-tech industries. Under the new structure, royalty will be charged at 2% of the average sale price (ASP) for caesium and rubidium, 1% for zirconium, and 2–4% for graphite depending on its carbon content.

The move is expected to facilitate auction of new mineral blocks, encourage domestic production, and reduce import dependence for industries such as electric vehicle batteries, electronics, nuclear energy, and aerospace. Graphite and zirconium are also part of India’s list of 24 critical and strategic minerals under the Mines and Minerals (Development and Regulation) Act.