Big Boost for MSME Exporters: Interest Rebate and Loan Guarantee Schemes Rolled Out

MSME-exporters can take advantage of two schemes under the Export Promotion Mission (EPM). The two export incentive programs would be handled under the observation of the Ministry of Commerce and Industry, the Ministry of MSME, and Ministry of Finance.

According to information released by the Department of Commerce on Friday, under the first scheme, MSME exporters will receive a loan interest rebate of up to 2.75%. However, this rebate will only apply to exports of government-issued items. According to the Department of Commerce, a list of these items will be released in due course. This scheme is currently being launched on a pilot basis.

The MSME exporters of defense products will benefit through the above-mentioned scheme too. The policy states that the interest rebates on the pre-shipment as well as the post-shipment loans will be paid to the MSME exporters only. The purpose behind the above initiative is to make the manufactured product cost-effective as compared to other countries’ products and be able to compete with other countries in the international market. The second scheme stated above provides a guarantee by the government for the loans taken by the MSME exporters.

The government will guarantee 85 percent of loans for micro and small exporters and 65 percent for medium exporters. The government will only guarantee loans up to a maximum of ₹10 crore per exporter in a financial year. Detailed guidelines will be issued soon. Exports primarily related to employment-oriented sectors will be eligible for both schemes. In November last year, the government approved the Export Promotion Mission.

Under this initiative, the government will provide incentives worth ₹25,000 crore to promote exports between the current fiscal year 2025-26 and 2030-31. Increasing commodity exports is essential to increase India's share in the global supply chain. This will boost both manufacturing and employment in the country.