(MENAFN- KNN India) New Delhi, Oct 13 (KNN) The government is set to introduce a new interest subvention scheme aimed exclusively at MSME exporters, providing a 3% interest rebate on export credit.

This move is designed to help small and medium-sized exporters remain competitive amid rising global trade pressures, including recent U.S. tariffs on Indian goods.

According to official sources, the proposal will soon be placed before the Union Cabinet for approval and may be implemented for a five-year period.

The scheme will particularly benefit labour-intensive sectors such as textiles, handicrafts, gems and jewellery, leather, footwear, furniture, and toys-areas that represent a large portion of India's MSME export base. The subsidy will lower borrowing costs for exporters availing pre- and post-shipment credit.

The initiative replaces the earlier Interest Equalisation Scheme (IES), which offered a 3% subsidy to all exporters since 2015.

The IES was last extended until December 2024, after which it was discontinued. It helped reduce effective borrowing rates from around 9–12% to 5–7%, easing financial stress on exporters.

In FY24, the scheme cost the exchequer Rs 3,699 crore, but expenditure fell to around Rs 2,482 crore in FY25 due to its partial rollout.

The new version will likely be part of the upcoming Export Promotion Mission (EPM) for FY2026, currently under inter-ministerial review.

Export bodies such as the Federation of Indian Export Organisations (FIEO) have urged the government to extend a 5% subsidy to all exporters, citing high tariff challenges in global markets.

The new subvention scheme, however, is expected to remain focused on MSMEs to maximise support for vulnerable exporters.

(KNN Bureau)

MENAFN13102025000155011030ID1110188675