The Indian government has unveiled a comprehensive $3 billion export mission designed to empower Micro, Small, and Medium Enterprises (MSMEs).
The initiative introduces seven targeted measures focusing on credit access, logistics infrastructure, and compliance support to integrate Indian exporters into global value chains.
A central pillar of the mission is expanding financial support, particularly for digital and e-commerce exporters:
- Direct E-Commerce Credit Facility: Offers loans up to ₹5 million (approx. $60,000) with 90% government-backed guarantee coverage. This reduces lending risk for financial institutions and opens capital for small exporters.
- Overseas Inventory Credit Facility: Provides up to ₹50 million (approx. $600,000) in financing with 75% guarantee coverage. It includes a 2.75% interest subsidy (capped at ₹1.5 million annually), helping exporters maintain overseas stock for faster delivery.
- Export Factoring Subsidy: To ease working capital crunches, the government offers a 2.75% interest subsidy on export factoring costs. This allows businesses to sell receivables for immediate cash flow. Capped at ₹5 million annually per MSME, this applies to transactions via RBI or IFSCA-recognized entities.
Reducing Compliance Costs (TRACE) The Trade Regulations, Accreditation and Compliance Enablement (TRACE) program addresses the high cost of international certification.
- Reimbursement: Exporters can claim up to 75% of testing and certification costs (under a “Priority Positive List”) or 60% (under a standard “Positive List”).
- Cap: The benefit is limited to ₹2.5 million per Import Export Code (IEC) annually.
Two key initiatives aim to lower transportation costs and improve supply chain efficiency:
- FLOW (Facilitating Logistics, Overseas Warehousing and Fulfillment): Connects exporters to global distribution networks and offers financial support of up to 30% of project costs for overseas warehousing.
- LIFT (Logistics Interventions for Freight and Transport): Targets exporters in remote, northeastern, or landlocked regions. It reimburses up to 30% of freight expenses, capped at ₹2 million per IEC per fiscal year.
To help exporters navigate new markets, the mission includes:
- INSIGHT (Support for Trade Intelligence): Funds projects to enhance market data systems, covering up to 50% of costs (or 100% for government institutions).
- Risk Mitigation: Facilitates alternative trade instruments, such as Letters of Credit (LCs), to secure payments in emerging or high-risk destinations.