Amendments to Guidelines for Interest Subvention Support under EXPORT PROMOTION MISSION

Amendments to Guidelines for Interest Subvention Support under EXPORT PROMOTION MISSION – NIRYAT PROTSAHAN

The Government of India, through the Ministry of Commerce & Industry, has issued Trade Notice No. 22/2025-26 dated January 16, 2026, introducing key amendments and insertions to the guidelines for Interest Subvention Support for Pre- and Post-Shipment Export Credit under the EXPORT PROMOTION MISSION (EPM) – NIRYAT PROTSAHAN. These changes aim to provide operational clarity and ensure effective implementation of the scheme for eligible exporters, particularly Micro, Small, and Medium Enterprises (MSMEs).

Key Amendments and Insertions:

1. Revised Guidelines for Export Credit Qualification 

Previous Provision: Export credit extended by lending institutions in accordance with RBI Master Directions on Pre- and Post-Shipment Export Credit qualified for support.
Revised Provision: Export credit extended by lending institutions in accordance with the Reserve Bank of India’s consolidated Directions on Credit Facilities, as amended from time to time, will now qualify for support.

2. Support for MSME Exporters 

Previous Provision: Support was available exclusively to eligible MSME exporters for financing export transactions and applied only to the credit cost element.
Revised Provision: Support will now apply specifically to the interest cost, ensuring better alignment with financial and regulatory guidelines.

3. New Provisions Introduced

Interest Subvention Rates: Revised interest subvention rates will apply only to export credit facilities sanctioned on or after the date of notification. Existing facilities will continue under the subvention rate applicable at the time of sanction.
Exclusion of Deemed Exports: Interest subvention will not be admissible for deemed exports as defined under Chapter 7 of the Foreign Trade Policy (FTP) 2023.
Non-Performing Accounts: Export credit accounts that turn non-performing before completing the eligible export cycle will not qualify for interest subvention.
MSME Reclassification: Exporters who graduate out of the MSME category during the financial year due to an upward change in investment or turnover will remain eligible for interest subvention support for three years from the date of reclassification, subject to compliance with Ministry of MSME Notification S.O. 4926(E) dated October 18, 2022.
Multiple Lending Institutions: Exporters availing export credit from multiple lending institutions must ensure that aggregate interest subvention claims remain within the prescribed annual ceiling. Any excess claims will be recoverable as per applicable provisions.

4. Changes to Reimbursement Process

Previous Provision: Funds were placed in advance with RBI for one month, and reimbursement was made on a monthly basis through a revolving fund system.
Revised Provision: Reimbursement to banks will now be limited to the actual amount of interest subvention extended to eligible exporters, based on verified claims submitted by banks to the RBI.

5. Determination of Interest Rates 

Previous Provision: Banks were required to sanction export credit facilities at the prescribed rate of interest.
Revised Provision: Lending institutions will now have commercial discretion to determine interest rates on export credit, in compliance with regulatory directions. Interest subvention will be extended on the actual interest cost borne by the exporter, as per the notified subvention rate.

6. Streamlined Submission of Claims

Previous Provision: Banks submitted IEC-wise monthly reimbursement claims manually within 15 days from the end of each month.
Revised Provision: Banks must now submit IEC-wise monthly interest subvention reimbursement claims online through a designated portal within 15 days from the end of each month. All related reports, including consolidated and bank-wise monthly statements, must also be submitted online, eliminating manual or offline submissions.

Additional Provisions:

For FY 2025-26, the annual ceiling on interest subvention will apply in full and will not be subject to pro-rata adjustment, regardless of the date of sanction or duration of utilisation during the financial year.
Interest subvention will only be applicable to export credit sanctioned on or after January 2, 2026, as per Trade Notice No. 20/2025-26. Export credit sanctioned prior to this date will not be eligible.

Conclusion:

These amendments and insertions reflect the government’s commitment to supporting MSME exporters and ensuring transparency and efficiency in the implementation of the Interest Subvention Support scheme under the EXPORT PROMOTION MISSION – NIRYAT PROTSAHAN. By addressing operational challenges and aligning the guidelines with regulatory norms, the Directorate General of Foreign Trade aims to bolster India’s export sector and empower MSMEs to compete effectively in the global market.

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Source: DGFT

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