New Delhi: The government is set to allocate Rs 2,000 crore for the Credit Guarantee Scheme for Exporters, as announced by the Union Cabinet on Wednesday, according to sources. The National Credit Guarantee Trustee Company Limited (NCGTC) will need this amount to offer credit facilities of up to Rs 20,000 crore to qualified exporters, with some funds already available to the company. The disbursement of funds may occur through supplementary demands for grants following Parliament’s approval, sources indicated.
In an effort to boost exports, the Union Cabinet has sanctioned the introduction of the Credit Guarantee Scheme for Exporters (CGSE), which provides 100 per cent credit guarantee coverage by NCGTC to Member Lending Institutions (MLIs) for offering additional credit facilities up to Rs 20,000 crore to eligible exporters, including MSMEs. The Department of Financial Services (DFS) will implement the scheme through NCGTC, facilitating enhanced credit support by MLIs for eligible exporters, particularly MSMEs. A management committee, chaired by the Secretary of DFS, will be established to monitor the scheme’s progress and implementation. The initiative aims to improve the global competitiveness of Indian exporters and aid in diversification into new and emerging markets.
By permitting collateral-free access to credit under CGSE, it is expected to bolster liquidity, ensure seamless business operations, and further India’s goal of achieving a USD 1 trillion export target along with advancing towards Aatmanirbhar Bharat. Exports are a vital component of the Indian economy, representing nearly 21 per cent of GDP in 2024-25 and significantly contributing to foreign exchange reserves. Export-focused sectors directly and indirectly employ over 45 million individuals, with MSMEs accounting for nearly 45 per cent of total exports. Continuous growth in exports has played a crucial role in maintaining India’s current account balance and macroeconomic stability.