In a significant move to strengthen India’s export ecosystem, the Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the Credit Guarantee Scheme for Exporters (CGSE). The scheme aims to provide up to Rs 20,000 crore in collateral-free credit support to eligible exporters, including those from the MSME sector, with 100% guarantee coverage offered through the National Credit Guarantee Trustee Company Limited (NCGTC).
The Department of Financial Services (DFS) will oversee the implementation of the scheme through NCGTC. Member Lending Institutions (MLIs) will extend additional credit facilities under this framework. A Management Committee, chaired by the Secretary of DFS, will monitor and review the progress of the scheme’s rollout.
Expected Impact
The CGSE is designed to enhance liquidity among exporters, ensure operational stability, and drive diversification into new and emerging global markets. By facilitating collateral-free access to funds, the initiative seeks to strengthen India’s export competitiveness and contribute to the nation’s goal of achieving USD 1 trillion in exports. The scheme is also expected to bolster employment generation and reinforce India’s path towards Aatmanirbhar Bharat (self-reliant India).
Economic Context
Exports remain a crucial pillar of the Indian economy, contributing around 21% to the GDP in FY 2024–25. Export-oriented industries employ over 45 million people, with MSMEs accounting for nearly 45% of total exports. Sustained export growth has been vital to maintaining India’s current account balance and macroeconomic stability.
The Cabinet’s approval reflects the government’s proactive approach to ensuring exporters receive timely financial support for market diversification and global competitiveness — a move that is likely to have far-reaching effects on India’s trade and employment landscape.
Comments