Government’s new Credit Guarantee Scheme for Exporters to extend additional credit facilities

The Union Cabinet, chaired by the Prime Minister, has approved the introduction of the Credit Guarantee Scheme for Exporters (CGSE), providing 100% credit guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs) for extending additional credit facilities up to Rs 20,000 crore to eligible exporters, including MSMEs. 

Implementation strategy and targets

The scheme shall be implemented by the Department of Financial Services (DFS) through National Credit Guarantee Trustee Company Limited (NCGTC) to provide additional credit support by MLIs to eligible exporters including MSMEs. A management committee, formed under the chairmanship of the Secretary, DFS, will oversee the progress and implementation of the scheme. 

Major impact

The scheme is expected to enhance the global competitiveness of Indian exporters and support diversification into new and emerging markets. By enabling collateral-free credit access under CGSE, it will strengthen liquidity, ensure smooth business operations, and reinforce India’s progress towards achieving the USD 1 trillion export target. 

Background

Exports are a critical pillar of the Indian economy, accounting for nearly 21% of GDP in FY 2024-25 and contributing significantly to foreign exchange reserves. Export-oriented industries directly and indirectly employ over 45 million people, and MSMEs contribute nearly 45% of total exports. Sustained export growth has been instrumental in supporting India’s current account balance and macroeconomic stability.

It is important, therefore, to extend enhanced financial assistance and adequate time to exporters to diversify their markets and boost global competitiveness. Accordingly, proactive government intervention to provide additional liquidity support will ensure business growth and also enable expansion of markets, said a release.

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