Guidelines for Interest Subvention Support for Pre- and Post Shipment Export Credit

Government of India Ministry of Commerce & Industry Department of Commerce Directorate General of Foreign Trade Vanijya Bhawan, New Delhi

Trade Notice No. 20/2025-26 Dated: 02nd January 2026

Subject: Launch of Interest Subvention for Pre- and Post- Shipment Export Credit under EXPORT PROMOTION MISSION – NIRYAT PROTHSAHAN – regarding

The Interest Subvention for Pre- and Post- Shipment Export Credit intervention under the EXPORT PROMOTION MISSION – NIRYAT PROTHSAHAN is hereby launched with immediate effect to facilitate improved access to pre- and post-shipment rupee export credit for MSME exporters by reducing the cost of such credit and provide a rules-based and transparent interest-relief mechanism aimed at enhancing liquidity for MSME exporters and enabling them to meet working-capital requirements efficiently.

The detailed Guidelines for implementation of Interest Subvention for Pre- and Post- Shipment Export Credit are enclosed in the Annexure-I.

2. Implementation Framework and Key Benefits for Exporters The intervention is being operationalised through the Reserve Bank of India on a pilot basis. Salient features for exporters include:

i. The rate of interest subvention @ 2.75 % per annum will be available on Pre Shipment Rupee Export Credit and Post Shipment Rupee Export Credit for Micro, Small Enterprises, and Medium Enterprises; ii. An MSME exporter may receive a maximum subvention benefit of Rs 50 lakh per financial year. iii. Support limited to export credit extended by lending institutions in accordance with the Reserve Bank of India’s Master Directions on Pre- and Post-Shipment Export Credit; iv. Applicability to MSME manufacturer exporters and merchant exporters under the notified positive list of HSN six-digit tariff lines.

3. The detailed Guidelines for Interest Subvention for Pre- and Post- Shipment Export Credit are enclosed at Annexure-I. The positive list of eligible HSN six-digit tariff lines is enclosed at Annexure-II. The procedure for online filing of intent by eligible MSME exporters on the DGFT portal, including step-by-step application requirements, is enclosed at Annexure-III.

4. Pilot Roll-out and Stakeholder Consultation The component is being implemented on a pilot basis to enable early access for exporters and to facilitate stakeholder feedback. In terms of paragraph 1.07A of the Foreign Trade Policy (FTP) 2023, the enclosed Guidelines are also being issued for stakeholder consultation.

Accordingly, all concerned stakeholders are invited to submit comments and suggestions on the draft Guidelines within 30 days from the date of issuance of this Trade Notice at epm-dgft@gov.in.

5. The consultation process shall run concurrently with the pilot implementation. Feedback received from stakeholders, along with operational learnings from the pilot phase, shall be examined in a structured manner. Based on the same, the Guidelines shall be suitably refined and thereafter formalised through appropriate notifications under the FTP/HBP framework.

This Trade Notice is issued with the approval of the Competent Authority.

B KRUTI Digitally signed by B KRUTI Date: 2026.01.02 18:02:19 +05'30' B Kruti Deputy Director General of Foreign Trade

(Issued from F.No. 01/02/48/AM-26/EPM)

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ANNEXURE-I To TRADE NOTICE DRAFT PROVISIONS FOR FOREIGN TRADE POLICY (FTP)

Section X- Interest Subvention Support for Pre- and Post Shipment Export Credit X.1 Objective a. The objective is to facilitate improved access to pre- and post-shipment rupee export credit for MSME exporters by reducing the cost of such credit. b. The initiative seeks to provide a rules-based and transparent interest-relief mechanism aimed at enhancing liquidity for MSME exporters and enabling them to meet working-capital requirements efficiently. The support shall be limited to the cost of credit and shall not be linked to export performance, pricing, quantities exported, or export-contingent conditions. c. The initiative aims to ensure that MSME exporters are able to obtain export credit on competitive terms, particularly in sectors facing higher financing constraints, without conferring any prohibited export-contingent subsidy or incentive.

X.2 Scope and Coverage a. The initiative shall extend interest subvention on pre- and post-shipment rupee export credit provided by eligible Lending Institutions (MLIs), subject to the conditions notified by the competent authority. b. The support shall be available exclusively to eligible MSME exporters for financing export transactions and shall apply only to the credit cost element, in accordance with applicable financial and regulatory guidelines. c. The detailed operational framework—including eligibility conditions, application procedures, reporting and monitoring requirements, prudential safeguards, and verification mechanisms—shall be prescribed in Chapter X of the Handbook of Procedures (HBP).

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DRAFT PROVISIONS FOR HANDBOOK OF PROCEDURES (HBP)

X.1. Eligibility, Scope and Coverage a. All MSME manufacturer exporters and merchant exporters holding a valid active Importer-Exporter Code (IEC) (not suspended, cancelled or in the Denied Entity List (DEL)) and a valid MSME Udyam Registration Number shall be eligible to receive interest subvention support on pre- and post-shipment rupee export credit. b. Only export credit extended by lending institutions in accordance with the Reserve Bank of India’s Master Directions on Pre- and Post-Shipment Export Credit shall qualify for support under this component. c. Interest subvention support shall be available only in respect of export credit availed for exports under a notified positive list of tariff lines defined at Harmonised System of Nomenclature (HSN) six-digit level. d. The positive list shall be reviewed periodically based on objective parameters such as sectoral MSME concentration, export concentration ratios, labour intensity, and other relevant considerations, and shall not be linked to any export performance or minimum export threshold. e. The beneficiary shall be responsible for ensuring that the interest subvention is claimed and utilised strictly against export credit corresponding to the eligible tariff lines only. Any misutilisation or incorrect claim shall render the exporter liable for recovery and other action as per applicable rules.

X.2. Implementing Framework a. Export credit shall continue to be sanctioned and disbursed by eligible commercial lending institutions as per applicable RBI guidelines. The interest subvention shall be passed on upfront to the eligible MSME exporter by the lending institution, and the corresponding reimbursement shall be claimed by the lending institution from the Reserve Bank of India (RBI) as per operational procedures notified from time to time. b. Any amendments, operational instructions, or clarifications relating to the obligations of member lending institutions shall be issued through circulars or notifications as may be required.

X.3. Nature and Extent of Assistance a. Rates of interest subvention for Micro, Small and Medium enterprises (as defined by the Ministry of MSME) shall be notified separately, after appropriate benchmarking with prevailing risk-free or reference rates in comparable economies and after consultation with the Sub-Committee on Trade Finance. b. The notified rates of subvention shall be reviewed on a bi-annual basis and revised, where necessary, preferably in the last week of March and September of each financial year. c. An annual ceiling shall apply to the total subvention benefit that an MSME exporter may receive in a given financial year. The annual ceiling shall be notified separately and reviewed preferably in the last week of April. d. Additional support shall be extended to MSME exporters exporting to new geographies. Detailed guidelines shall be provided subsequently.

X.4. Intent Filing and Verification a. Eligible MSME entity shall, prior to applying for export credit, file an online declaration of intent to avail interest subvention. Upon submission, a Unique Identification Number (UIN) shall be generated. b. The UIN shall be electronically linked to the bank account specified by the entity in their IEC profile and shall remain valid until the end of the relevant financial year. c. Each UIN shall correspond to one lending bank. Where an MSME entity avails export credit from multiple banks, separate UINs may be generated for each such bank. d. The Entity shall furnish the applicable UIN to their lending bank, and the bank shall report interest subvention claims mapped to the corresponding UIN. e. Both the entity and the lending bank shall ensure that interest subvention claims remain within the prescribed annual ceiling. Any excess amount claimed or disbursed beyond the permissible cap shall be voluntarily surrendered within the same financial year. Failure to surrender any excess claim within the prescribed timeframe shall render the amount liable for recovery in accordance with applicable rules and procedures.