Union cabinet approves Credit Guarantee Scheme to boost Indian exports
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New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the Credit Guarantee Scheme for Exporters, providing 100 per cent credit guarantee coverage to member lending institutions (MLIs) for extending additional credit facilities of up to Rs 20,000 crore to eligible exporters, including MSMEs.
The scheme will be implemented by the Finance Ministry’s Department of Financial Services (DFS) through the National Credit Guarantee Trustee Company (NCGTC) Ltd. A management committee, chaired by the DFS Secretary, will oversee the scheme’s progress and implementation, according to an official statement.
The initiative aims to enhance the global competitiveness of Indian exporters and support diversification into new and emerging markets. By enabling collateral-free credit access, the Credit Guarantee Scheme for Exporters (CGSE) will strengthen liquidity, ensure smooth business operations, and reinforce India’s drive toward achieving the $1 trillion export target. The scheme also aligns with the government’s vision of Aatmanirbhar Bharat.
Exports are a critical pillar of India’s economy, contributing nearly 21 per cent of GDP in FY 2024-25 and playing a key role in foreign exchange reserves. Export-oriented industries directly and indirectly employ over 45 million people, with MSMEs accounting for around 45 per cent of total exports. Sustained export growth has been vital for maintaining the current account balance and macroeconomic stability.
The government stressed that providing enhanced financial support and adequate time to exporters will help diversify markets and boost competitiveness. Proactive interventions will ensure business growth, protect jobs, and support expansion into new geographies.
The scheme is particularly significant as sectors like textiles, leather, gems & jewellery, engineering goods, and marine products face challenges due to recent global tariff escalations. The government’s measures are expected to sustain export orders, safeguard employment, and strengthen India’s position in international trade.
With IANS inputs