New Delhi: The government will soon allocate Rs 2,000 crore for the Credit Guarantee Scheme for Exporters announced by the Union Cabinet on Wednesday, sources said.
National Credit Guarantee Trustee Company Limited (NCGTC) would require Rs 2,000 crore to extend credit facilities of up to Rs 20,000 crore to eligible exporters, sources said, adding that some money is already with the company.
The funds could be provided through supplementary demands for grants after the Parliament approves grants, sources added.
In a bid to promote exports, the Union Cabinet on Wednesday approved the introduction of the Credit Guarantee Scheme for Exporters (CGSE) to provide 100 per cent credit guarantee coverage by NCGTC to Member Lending Institutions (MLIs) for extending additional credit facilities up to Rs 20,000 crore to eligible exporters, including MSMEs.
The scheme is being implemented by the Department of Financial Services (DFS) through NCGTC to provide additional credit support by MLIs to the eligible exporters, including MSMEs.
A management committee will be formed under the chairmanship of the Secretary, DFS, to oversee the progress and implementation of the scheme.
The scheme is expected to enhance the global competitiveness of Indian exporters and support diversification into new and emerging markets.
By enabling collateral-free credit access under CGSE, it will strengthen liquidity, ensure smooth business operations, and reinforce India’s progress towards achieving the USD 1 trillion export target as well as the country’s journey towards Aatmanirbhar Bharat.
Exports are a critical pillar of the Indian economy, accounting for nearly 21 per cent of GDP in 2024-25 and contributing significantly to foreign exchange reserves. Export-oriented industries directly and indirectly employ over 45 million people, and MSMEs contribute nearly 45 per cent of total exports.
Sustained export growth has been instrumental in supporting India’s current account balance and macroeconomic stability.
It is important to extend enhanced financial assistance and adequate time to exporters for diversifying their markets and enhancing the global competitiveness of Indian exporters.
Accordingly, proactive government intervention to provide additional liquidity support will ensure business growth and also enable the expansion of markets.