Parliament Question: Interest subsidy mechanism for MSMEs

GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES RAJYA SABHA UNSTARRED QUESTION NO. 1990 ANSWERED ON TUESDAY, 10th MARCH 2026/ 19 PHALGUNA 1947 (SAKA) INTEREST SUBSIDY MECHANISM FOR MSMEs

1990. SHRI YERRAM VENKATA SUBBA REDDY

Will the Minister of FINANCE be pleased to state:

(a) whether it is a fact that Government has recently unveiled a new interest subsidy mechanism for MSMEs along with a corpus to guarantee loans to small businesses that export;

(b) if so, the details thereof;

(c) what would be the interest subvention that the said scheme is going to give to MSMEs and exporters from MSME sector; and

(d) the duration of the said scheme? ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (d) The Export Promotion Mission (EPM), a flagship initiative of the Department of Commerce, has two sub-schemes viz. Niryat Protsahan and Niryat Disha to strengthen MSME exports and improve access to trade finance. Under Niryat Protsahan, the following two interventions related to interest

subvention have been launched: i. The first intervention relates to interest subvention for pre- and post-shipment export credit, aimed at reducing the cost of export credit and easing working-capital constraints faced by MSME exporters.

Under this intervention, interest subvention is provided on pre- and post-shipment rupee export credit extended by eligible lending institutions. A base interest subvention of 2.75 per cent is provided under the intervention, subject to a maximum of ₹ 50 lakh per Importer Exporter Code (IEC) for FY 2025–

26. ii. Credit Assistance for E-Commerce Exporters- To support exporters using digital channels, structured credit facilities are being introduced with interest subvention and partial credit guarantees. Under this intervention, guarantee coverage of 75% and 90% is available depending upon the category of borrower and type of facility. Interest subvention of 2.75% is available, subject to an annual ceiling of ₹15 lakh per applicant.

Credit Guarantee Scheme for Exporters (CGSE) was introduced in November, 2025 for providing 100% credit guarantee coverage by National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs) for extending additional credit facilities upto ₹ 20,000 crore to eligible exporters, including MSMEs. The scheme would be available from the date of announcement of the Scheme till issue of guarantees for loans amounting to ₹ 20,000 crore or 31.03.2026, whichever is earlier.

Further, Mutual Credit Guarantee Scheme for MSMEs (MCGS-MSME), inter alia, enables guarantee coverage for term loan assistance of upto ₹ 20 crore to well-run exporter MSMEs (engaged in manufacturing or service) for their projects involving purchase of equipment/ machinery. The scheme would be available for a period of 4 years from the date of issue of the guidelines.

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