New Delhi, Nov 12 (IANS) The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved the introduction of the Credit Guarantee Scheme for Exporters for providing 100 per cent credit guarantee coverage to member lending institutions for extending additional credit facilities up to Rs 20,000 crore to eligible exporters, including MSMEs.

The scheme will be implemented by the Finance Ministry’s Department of Financial Services (DFS), through the National Credit Guarantee Trustee Company (NCGTC) Ltd, to provide additional credit support by MLIs to the eligible exporters, including MSMEs. A management committee formed under the chairmanship of the Secretary, DFS, will oversee the progress and implementation of the scheme, according to an official statement.

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, the Credit Guarantee Scheme for Exporters (CGSE) will strengthen liquidity, ensure smooth business operations and reinforce India’s progress towards achieving the $1 trillion export target. This will further reinforce India’s journey towards Aatmanirbhar Bharat, the statement said.

Exports are a critical pillar of the Indian economy, accounting for nearly 21 per cent of GDP in FY 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 expansion of markets, the statement added.

The government has stepped up its focus on exports as several sectors, such as textiles, leather, gems & jewellery, engineering goods, and marine products, have been impacted by recent global tariff escalations. The interventions will help sustain export orders, protect jobs, and support diversification into new geographies.

–IANS

sps/vd