Exporters Can Access Up to Rs 50 Crore at Concessional Rates Under New Credit Guarantee Scheme

Exporters in India can now access additional credit of up to Rs 50 crore each at a reduced interest rate. This is part of the Credit Guarantee Scheme for Exporters introduced by the government. The scheme aims to provide full guarantee coverage for extra credit facilities needed by exporters seeking more working capital.

The Union Cabinet has approved this scheme to offer relief to exporters, including MSMEs. The National Credit Guarantee Trustee Company Limited (NCGTC) will provide 100 per cent credit guarantee coverage to Member Lending Institutions (MLIs). This initiative allows for additional credit facilities up to Rs 20,000 crore.

Scheme Details and Benefits

Under this scheme, exporters can access up to 20 per cent of their sanctioned export working capital limits. Indirect exporters are eligible for up to 20 per cent of their working capital limits, with a cap of Rs 50 crore. The interest rate on this facility is set at 1 per cent lower than existing rates.

The loan term under this scheme is four years from the first disbursement date, including a one-year moratorium. The scheme is effective from the issuance date of guidelines by NCGTC and will remain applicable until March 31, 2026, or until guarantees worth Rs 20,000 crore are issued.

Challenges Faced by Exporters

Exporters have been struggling due to a significant tariff imposed by the United States on Indian goods. This tariff, which stands at 50 per cent, came into effect on August 27. The new scheme aims to help exporters manage these challenges by providing them with necessary financial support.

The Credit Guarantee Scheme for Exporters is designed to address short-term financial mismatches and help explore new markets. By offering a concessional rate and full guarantee coverage, the government hopes to ease the financial burden on exporters during these challenging times.

This initiative reflects the government's commitment to supporting the export sector amid global trade challenges. By ensuring access to affordable credit, it aims to bolster the competitiveness of Indian exporters in international markets.

With inputs from PTI