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Schemes under Export Promotion Mission to roll out in 4-5 months with ₹2,250 crore allocation

Schemes under Export Promotion Mission to roll out in 4-5 months with ₹2,250 crore allocation

The government is in the process of finalising schemes under the Export Promotion Mission, announced in Union Budget 2025, with an allocation of ₹2,250 crore. The schemes, aimed at MSME exporters, are expected to be rolled out within the next four to five months. The Mission will be jointly driven by the Ministries of Commerce, MSME, and Finance to facilitate easy export credit access, cross-border factoring support, and MSME assistance.

The initiatives under the Mission focus on credit availability at easier terms, strengthening factoring services as an alternate financing instrument, and addressing non-tariff barriers imposed by other countries. A key emphasis will be on expanding factoring services to reduce exporters’ dependence on banks.

Despite being a widely used financing tool globally, export factoring services have seen limited adoption in India due to high interest rates, risk premiums, and lack of parity with subvention schemes. The government aims to increase cross-border factoring, noting that India has significantly fewer factoring companies compared to over a thousand in China.

The Mission will merge the Interest Equalisation Scheme, lab-grown diamond scheme, and Market Access Initiatives (MAI), with an average collateral cover and a cap on individual exporters, targeting over 1 lakh exporters. While RBI is working on a unified lending mechanism, surveys by ICRIER, DGFT, and FIEO highlight that 80% of MSMEs face collateral demands, making export credit facilitation a critical issue.

The Mission is a merger of Interest Equalisation Scheme, lab diamonds scheme and Market Access Initiatives (MAI), with an average collateral cover to be given with cap on individual exporters and a target of over 1 lakh exporters. While RBI is working on a unified lending mechanism, surveys by ICRIER, DGFT and FIEO have indicated export credit facilitation as an issue for exporters as 80% MSMEs faced demand for collateral.

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