Export Promotion Mission: MSMEs at the Core

The government is set to initiate inter-ministerial discussions to finalize schemes under the Export Promotion Mission, a senior official stated.  

A significant portion of the ₹2,250 crore allocated for the mission will be directed towards addressing export credit needs for micro, small, and medium enterprises (MSMEs) and encouraging the use of alternative financing tools like factoring.  

The ministries of finance and MSMEs, along with the commerce department, are developing these schemes, which were announced in the FY26 Budget. Once finalized, they will be presented for Cabinet approval, according to Santosh Kumar Sarangi, Director General of Foreign Trade.  

To improve export financing, the government is working on easing collateral requirements for exporters. A mechanism is being explored to increase export credit access with little or no collateral.  

For context, export credit required for $437 billion in exports during 2023-24 stood at $284 billion, while only $124.7 billion was provided. By 2030, when exports are expected to reach $1 trillion, the estimated credit requirement will rise to $650 billion.  

Additionally, collateral support per exporter will be capped, and the government is keen on promoting factoring services, which are widely used globally. Factoring allows exporters to sell their receivables at a discount to a service provider, who assumes the risk of collecting payments. The government is considering bridging part of the gap between the receivable’s value and the discounted price.  

To help MSMEs navigate non-tariff barriers, the mission may reimburse costs related to registration, testing, certification, and inspection for compliance with standards such as organic, halal, energy audits, and the EU’s carbon tax and deforestation rules. Support will also extend to acquiring machinery to meet these standards and diversifying supply chains, ensuring farmers and fishermen comply with global regulations on permissible antibiotics and pesticides.