Government Strengthens Export Credit Support for MSMEs Under Interest Equalisation Scheme

New Delhi, March 25, 2025: The Indian government has announced that around 11,000 exporters are currently benefiting from the Interest Equalisation Scheme, which provides concessional credit to mitigate the high cost of borrowing. This scheme plays a crucial role in helping MSME exporters compete globally by reducing their interest burden.

Indian exporters typically face interest rates between 8-12%, whereas competing countries like China (3.1%), Malaysia (3%), Thailand (2%), and Vietnam (4.5%) offer significantly lower rates. To bridge this gap, the government has been offering 3% interest equalisation for MSME exporters and 2% for 410 identified product categories under this scheme until June 30, 2024.

From July 1, 2024, to December 31, 2024, the scheme has been partially extended but only for MSME manufacturer-exporters, with a value cap of ₹50 lakh per exporter. Additionally, the scheme has now been merged under the Export Promotion Mission, with a budget allocation of ₹2,250 crore. The government is also engaging with industry stakeholders to improve export credit accessibility, cross-border factoring support, and assistance in handling non-tariff barriers in global markets.

In another key update, the government reported that as of December 2024, a total of ₹13,029 crore has been disbursed under the Production-Linked Incentive (PLI) Scheme across nine major sectors, including Large-Scale Electronics Manufacturing, IT Hardware, Bulk Drugs, Medical Devices, Pharmaceuticals, Telecom & Networking Products, Food Processing, White Goods, and Drones. The PLI scheme aims to boost domestic manufacturing, increase exports, and reduce import dependence, further strengthening India’s MSME ecosystem.

With these strategic initiatives, the government is reinforcing its commitment to enhancing MSME growth, increasing global competitiveness, and supporting exporters with financial assistance. By addressing key financial challenges, these schemes provide a strong foundation for India’s MSMEs to expand their global footprint and thrive in international trade.

Disclaimer: This summary is for informational purposes and readers should verify specific details through official reports or consult industry professionals for comprehensive insights.