New Delhi, November 13: In a major step to support India’s outbound trade, the Union Cabinet has approved the Credit Guarantee Scheme for Exporters (CGSE), enabling banks and financial institutions to extend up to ₹20,000 crore in additional collateral-free credit to eligible exporters, including MSMEs.
The scheme—backed by a 100% government guarantee through the National Credit Guarantee Trustee Company (NCGTC)—is designed to ease cash-flow stress, promote market diversification and sharpen India’s export competitiveness at a time of global trade uncertainty.
NCGTC to Anchor Rollout; DFS to Oversee Implementation
The initiative will be operationalised by the Department of Financial Services (DFS) through NCGTC, with a management committee led by the DFS Secretary monitoring progress and on-ground execution. Banks and Member Lending Institutions (MLIs) will be able to extend fresh credit lines to exporters without insisting on additional collateral.
Officials said the scheme aims to give exporters more headroom to manage working capital requirements and pursue new orders—particularly in emerging markets where entry costs are often higher.
Boost to Global Competitiveness and Market Diversification
According to the Cabinet note, the CGSE is expected to:
- improve liquidity across export-driven sectors
- support expansion into new geographies
- reinforce India’s trajectory towards the $1 trillion export milestone
- strengthen the country’s macroeconomic resilience
Exporters will also benefit from increased credit coverage during demand volatility and tariff-related disruptions—an issue several industries have faced in recent quarters.
Exports: A Major Pillar of Growth
Exports accounted for nearly 21% of India’s GDP in FY 2024–25, with export-oriented industries employing over 45 million workers across direct and indirect channels. MSMEs alone contribute around 45% of India’s total exports, underlining their central role in the outbound trade ecosystem.
Government officials say that sustained export growth remains essential for current account stability, foreign exchange reserves and India’s broader economic outlook.
Government Eyeing Faster Diversification
With global supply chains shifting and new markets opening across Africa, Southeast Asia and Latin America, the Centre believes exporters need both time and additional liquidity to expand their footprint. The CGSE is expected to give firms the financial space to adjust, invest and scale.
The approval marks another step in the government’s effort to create a robust, shock-resistant export framework under its Aatmanirbhar Bharat vision.
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