**Executive Summary**
This document is a response to Unstarred Question No. 1251 in Lok Sabha regarding trade deficiency affecting MSMEs. The response, dated December 8, 2025, outlines measures taken by the RBI to improve credit flow to MSMEs and details the Government's approved Scheme for Export Promotion Mission (EPM) for FY 2025-26 to FY 2030-31. The EPM was approved on November 12, 2025.
**Key Points / Main Content**
* **Export Finance:**
* Banks and Financial Institutions are the primary source of export finance in India.
* Total export credit disbursed by Public Sector Banks, SIDBI, and Exim Bank in the last five years (FY 20-21 to FY 24-25) amounted to Rs 21.71 lakh crores.
* **RBI Measures for Improving Credit Flow to MSMEs:**
* RBI has taken measures for improving credit flow to MSMEs, including exporters.
* These measures include:
* Collateral-free lending for loans up to Rs 10 lakhs.
* Relaxed capital requirement for such lending.
* Transparency in interest rates by linking to external benchmarks.
* RBI issued Reserve Bank of India (Trade Relief Measures), 2025 on 14.11.2025. This provides exporters with:
* Deferment in repayment of interest and principal installments.
* Extending export proceeds realisation period.
* Flexibility in packing credit liquidation.
* **Scheme for Export Promotion Mission (EPM):**
* Government has approved the Scheme for Export Promotion Mission (EPM) on 12.11.2025 for the period FY 2025-26 to FY 2030-31.
* Aimed at strengthening India's export competitiveness, particularly for MSMEs.
* EPM operates through two integrated sub-schemes: NIRYAT PROTSAHAN and NIRYAT DISHA.
* NIRYAT PROTSAHAN provides risk-mitigation mechanisms to strengthen export credit flow, including:
* Support for Collateral for Export Credit: Offers partial credit-risk coverage to lending institutions.
* Support for Emerging Export Opportunities: Proposes credit-enhancement support to facilitate MSME expansion into new and less-served international markets.
**Impact Analysis**
**MSME Exporters**
* **Impact:** MSME exporters will benefit from improved access to export finance, collateral-free lending, relaxed capital requirements, and risk-mitigation mechanisms.
* **Action Required:** MSMEs should explore available credit facilities and participate in the EPM sub-schemes to enhance their export capabilities and competitiveness.
**Lending Institutions (Banks, SIDBI, EXIM Bank, PSU Banks)**
* **Impact:** Lending institutions are supported through risk-mitigation mechanisms, particularly partial credit-risk coverage.
* **Action Required:** Lending institutions should implement the RBI's measures and leverage the EPM's risk-mitigation mechanisms to extend credit to MSME exporters effectively.
**RBI**
* **Impact:** The RBI plays a crucial role in implementing measures to improve credit flow to MSMEs, monitoring compliance, and providing trade relief.
* **Action Required:** The RBI should continue to monitor the effectiveness of its measures and adjust them as needed to further support MSME exporters.
Key Entities Referenced
Scheme for Export Promotion Mission (EPM): A scheme approved by the Government of India to strengthen India's export competitiveness, particularly for MSMEs, operating through NIRYAT PROTSAHAN and NIRYAT DISHA sub-schemes.
Reserve Bank of India (RBI): The regulator that has taken measures for improving credit flow to MSMEs, including regulations on collateral-free lending and transparency in interest rates.
SIDBI: A financial institution that disbursed export credit.
EXIM Bank: A financial institution that disbursed export credit.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 1251
ANSWERED ON MONDAY, 8th DECEMBER, 2025/Agrahayana 17, 1947 (Saka)
Trade Deficiency affecting MSMEs
1251. Sh. ARUP CHAKRABORTY:
Will the Minister of FINANCE be pleased to state:
(a) whether the country faces a trade finance gap adversely affecting its MSME exporters, especially in comparison with
emerging markets, if so, the details thereof;
(b) the total value of export credit disbursed during the last five years by SIDBI, EXIM Bank and PSU banks;
(c) whether the RBI has recommended measures to improve credit flow through non-collateralised and concessional
instruments, if so, the details thereof; and
(d) whether the Government proposes to establish a sovereign-backed export guarantee facility to support high-risk
exporters; if so, the details thereof?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (b) Banks and Financial Institutions have traditionally been the primary source of export finance in India. The total
export credit disbursed by Public Sector Banks, SIDBI and Exim Bank in last five years (FY 20-21 to FY 24-25) stood at
Rs 21.71 lakh crores.
(c) Reserve Bank of India (RBI) has taken several measures for improving credit flow to MSMEs (including exporters)
including regulations issued by RBI which stipulate (i) collateral free lending for loans upto Rs 10 lakhs, (ii) allows relaxed
capital requirement for such lending, (iii) transparency in interest rates by linking to external benchmarks, etc. Additionally,
RBI issued Reserve Bank of India (Trade Relief Measures), 2025 on 14.11.2025 providing various relief to exporters
including deferment in repayment of interest and principal instalments, extending export proceeds realisation period,
flexibility in packing credit liquidation, etc.
(d) As informed by Department of Commerce, Government has approved the Scheme for Export Promotion Mission (EPM)
on 12.11.2025 for the period FY 2025-26 to FY 2030-31, aimed at strengthening India’s export competitiveness –
particularly for MSMEs. The EPM operates through two integrated sub-schemes viz. NIRYAT PROTSAHAN and NIRYAT
DISHA. Under NIRYAT PROTSAHAN, while not amounting to a formal sovereign-backed export guarantee facility, two
interventions are proposed to strengthen export credit flow through supported risk-mitigation mechanisms. These are
intended to improve MSME access to export finance:
• Support for Collateral for Export Credit – provides partial credit-risk coverage to lending institutions, with the
objective of enabling exporters with inadequate collateral to access export credit channels.
• Support for Emerging Export Opportunities – proposes credit-enhancement support to facilitate MSME expansion
into new and less-served international markets.
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