Cabinet clears ₹20,000-crore collateral-free credit guarantee scheme for exporters

The Union Cabinet on Wednesday approved the Credit Guarantee Scheme for Exporters (CGSE) that will enable lending institutions to extend up to ₹20,000 crore in additional, collateral-free credit to exporters, including MSMEs, the government said.

Under the scheme, the National Credit Guarantee Trustee Company (NCGTC) will provide 100% credit guarantee coverage to member lending institutions (MLIs) for loans extended to eligible exporters, according to an official statement.

The scheme, cleared at a Cabinet meeting chaired by Prime Minister Narendra Modi, seeks to ease liquidity constraints, support market diversification and strengthen the competitiveness of Indian exporters amid global trade uncertainty.

It will be implemented by the Department of Financial Services (DFS) through NCGTC. A management committee headed by the DFS Secretary will monitor progress and oversee implementation.

The credit guarantee scheme is expected to expand access to credit for both MSME and non-MSME exporters, helping them maintain operations, explore new markets and enhance resilience.

The step is also in line with India’s goal of achieving USD 1 trillion in exports, it said.

Exports are a critical pillar of the Indian economy, accounting for nearly 21% of GDP in 2024-25 and contributing significantly to foreign exchange reserves.

Export-oriented industries directly and indirectly employ over 45 million people, with MSMEs contributing nearly 45 per cent of total exports.

“Sustained export growth has been instrumental in supporting India’s current account balance and macroeconomic stability. It is important to extend enhanced financial assistance and adequate time to exporters for diversifying their markets and enhance global competitiveness of Indian exporters,” the statement said.

The Cabinet also approved the Export Promotion Mission (EPM) with a total outlay of Rs 25,060 crore over six years.

The mission, announced in the Union Budget 2025-26, is designed to sharpen India’s export competitiveness, particularly for MSMEs, first-time exporters and labour-intensive sectors, according to an official readout.

The mission will be implemented through two sub-schemes - Niryat Protsahan (₹10,401 crore) and Niryat Disha (₹14,659 crore).