Rs 2,250 Crore Export Promotion Mission To Improve MSME Credit & Address Ntbs

(MENAFN- KNN India) New Delhi, Feb 5 (KNN) The Export Promotion Mission (EPM) has outlined its strategic allocation of its Rs 2,250 crore budget, with a primary focus on enhancing export credit accessibility for MSMEs and promoting alternative financing mechanisms.

Director General of Foreign Trade Santosh Kumar Sarangi revealed that while Rs 200 crore has been earmarked for the market Access Initiative and Rs 50 crore for lab-grown diamonds, the majority of funds will be directed toward developing comprehensive export credit schemes and addressing non-tariff barriers.

The initiative, to be jointly designed by the Ministry of Finance and Ministry of Commerce, marks a departure from the previous interest subsidy scheme for export credit that concluded on December 31, 2024.

The new approach aims to tackle one of the most pressing challenges faced by exporters: the high collateral requirements that currently impede four out of five MSMEs from accessing credit facilities.

The scope of the mission is particularly relevant given the current state of export financing in India.

With total export credit requirements standing at USD 284 billion for exports worth USD 437 billion in 2023-24, only USD 124.7 billion is currently being provided.

Looking ahead, the requirements are projected to reach USD 650 billion by 2030 to support the ambitious USD 1 trillion export target.

A key innovation in the mission's approach is the promotion of factoring services, an area where India significantly lags behind global standards.

While India currently has only 11 factoring companies compared to China's 2,000, the government plans to bridge the gap between export receivables and factoring service providers' acquisition prices.

The global cross-border factoring market, valued at USD 758 billion, presents a stark contrast to India's modest USD 1 billion, highlighting the substantial growth potential in this sector.

The mission also addresses non-tariff barriers facing MSMEs by providing support for conformity assessment compliance.

This includes reimbursement for various certification processes such as organic, halal, and electric goods certifications, as well as compliance with the European Union's carbon tax and deforestation regulations.

Additional support will be extended for the procurement of plant and machinery necessary for meeting global standards, including alternatives for permitted antibiotics and pesticides in agricultural and fishery sectors.

(KNN Bureau)

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