Government announces Rs 7,295-cr export package to improve exporters' access to credit

India's journey towards becoming a global economic powerhouse is inextricably linked to its export performance. For years, the Indian government has emphasized boosting exports as a critical driver for economic growth, employment generation, and strengthening the country's foreign exchange reserves. However, a significant bottleneck for exporters, particularly the Micro, Small, and Medium Enterprises (MSMEs), has consistently been access to affordable and timely credit. This challenge became even more pronounced amid global economic uncertainties, supply chain disruptions, and increased competition. The 'Make in India' and 'Atmanirbhar Bharat' initiatives, aimed at enhancing domestic manufacturing and self-reliance, implicitly depend on robust export capabilities to achieve their full potential and integrate India more deeply into global value chains.

In response to these persistent challenges, the Indian government recently unveiled a substantial export support package amounting to Rs 7,295 crore. This strategic intervention is designed to directly address the trade finance gaps faced by Indian exporters. The package is bifurcated into two primary components: a Rs 5,181-crore interest subvention scheme and Rs 2,114-crore earmarked for collateral support. An interest subvention scheme essentially means that the government will bear a part of the interest cost on loans taken by eligible exporters, thereby reducing their financial burden and making credit more affordable. The collateral support component is crucial for MSMEs, which often struggle to provide sufficient collateral to secure loans from banks, thus unlocking credit access for a segment that is vital yet underserved. These initiatives are not short-term fixes; they are planned to span a seven-year period, from 2025 to 2031, indicating a long-term commitment to fostering a conducive export ecosystem. A key focus of this package is on eligible MSMEs, with a specific emphasis on strategic sectors like defence and SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) products, aligning with India's broader strategic and economic objectives.

Several key stakeholders are involved in this initiative. The **Government of India**, primarily through the Ministry of Commerce & Industry and the Ministry of Finance, is the architect and financier of this package, responsible for its formulation, allocation of funds, and oversight. **Indian Exporters**, particularly the vast network of MSMEs, are the direct beneficiaries. Their enhanced access to credit will enable them to procure raw materials, invest in technology, scale up production, and compete more effectively in international markets. **Banks and Financial Institutions** act as intermediaries, disbursing the credit and benefiting from the government's interest subvention and collateral guarantees, which reduce their lending risk. Institutions like the **Export Credit Guarantee Corporation of India (ECGC)** play a crucial role in providing credit insurance and guarantees, complementing the collateral support. The **Reserve Bank of India (RBI)**, as the central banking authority, influences the overall credit environment and ensures financial stability, within which such schemes operate.

This package holds immense significance for India. Economically, it is poised to significantly boost India's export volumes, contributing to GDP growth and propelling the nation closer to its ambitious goal of becoming a $5 trillion economy. By alleviating credit constraints, it empowers MSMEs, which are the backbone of the Indian economy, contributing significantly to employment generation. Increased exports will also enhance India's foreign exchange earnings, crucial for managing the balance of payments and strengthening the Rupee. Furthermore, the focus on defence and SCOMET products aligns with India's 'Atmanirbhar Bharat' vision, promoting self-reliance in strategic sectors and enhancing India's global standing as a producer of high-tech goods. Historically, India has had various export promotion schemes, such as the Merchandise Exports from India Scheme (MEIS) and the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, each designed to address specific challenges. This new package continues that tradition, adapting to current needs and focusing on the critical aspect of credit access.

Looking ahead, the future implications are substantial. Successful implementation could lead to greater diversification of India's export basket, reducing reliance on traditional goods and increasing the share of value-added and high-tech products. It could also foster greater integration of Indian MSMEs into global supply chains, enhancing their competitiveness and resilience. However, challenges remain, including ensuring efficient disbursement of funds, adapting to global demand fluctuations, and navigating potential trade protectionist measures from other countries. The success of this package will hinge on its effective administration and continuous monitoring to ensure that the benefits reach the intended beneficiaries.

From a constitutional and policy perspective, while there isn't one direct constitutional article governing export promotion, the government's power to undertake such financial measures is derived from **Part XII of the Constitution (Finance, Property, Contracts, and Suits)**, particularly articles related to government spending and financial policies, such as **Article 266 (Consolidated Fund of India)** which deals with government receipts and disbursements. The legal framework for foreign trade is primarily governed by the **Foreign Trade (Development and Regulation) Act, 1992**, which empowers the central government to formulate and implement the Foreign Trade Policy (FTP). This package is an integral component of India's ongoing FTP. Furthermore, the **Micro, Small and Medium Enterprises Development (MSMED) Act, 2006**, provides the legal framework for the promotion and development of MSMEs, making this package directly aligned with its objectives. The broader policy context is the 'Atmanirbhar Bharat Abhiyan', launched in 2020, which emphasizes making India self-reliant and globally competitive, with exports being a crucial pillar.