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Credit Guarantee Scheme for Exporters (CGSE): A Big Boost for India’s Exporters, Especially MSMEs

The Union Cabinet, chaired by Prime Minister Narendra Modi approved the Credit Guarantee Scheme for Exporters CGSE on November 11 2025. This move is set to reshape export financing in India and provide meaningful relief to businesses that often struggle with tight liquidity and long payment cycles. For MSME exporters in particular the scheme brings timely support without the usual requirement of collateral.

What the Scheme Offers

Twenty Thousand Crore Collateral Free Credit

CGSE provides one hundred percent government backed credit guarantee coverage for exporters.
The National Credit Guarantee Trustee Company Limited NCGTC will offer the guarantee to banks and financial institutions allowing them to extend collateral free loans up to fifty crore rupees.

This removes a major barrier for small exporters who frequently find it difficult to pledge property or assets for working capital.

Extra Twenty Percent Working Capital

Eligible exporters can access an additional twenty percent of their sanctioned export working capital limit. This added liquidity helps them manage production supplies and international shipments without financial stress.

The credit is entirely collateral free and fully guaranteed by the government.

How the Scheme Is Managed

Administered by the Department of Financial Services DFS
Guarantee provider is NCGTC
Lenders include banks and non banking financial institutions
Oversight is handled by a management committee led by the Secretary of DFS

The scheme remains valid until March 31 2026 and may be extended based on future assessments.

Who Can Apply

CGSE covers both MSME exporters and non MSME exporters.
While detailed eligibility norms are expected to be released separately the scheme is clearly targeted at businesses that need additional liquidity to continue operations scale up and handle the challenges of global trade.

Why This Scheme Matters

Exports Drive Growth in India

Exports contributed twenty one percent of Indias GDP in the financial year 2024 to 2025.
The sector supports more than forty five million jobs.
MSMEs contribute nearly forty five percent of Indias total exports.

Despite their importance many small exporters struggle to secure timely and affordable financing. CGSE directly addresses this financing gap by offering guaranteed collateral free credit at scale.

Main Objectives of CGSE

The scheme aims to

Provide steady liquidity for exporters
Strengthen competitiveness in global markets
Support entry into new international destinations
Help India move closer to the one trillion dollar export goal
Advance the vision of Aatmanirbhar Bharat
Protect economic stability during periods of global trade disruption

Part of a Larger Support Package Export Promotion Mission

Along with CGSE the Cabinet approved the Export Promotion Mission EPM with an allocation of twenty five thousand sixty crore rupees for the period from financial year 2025 to 2026 through financial year 2030 to 2031.
Together CGSE and EPM form a combined forty five thousand sixty crore rupee support package for exporters.

The EPM consists of two major parts

Niryat Protsahan

Focus on export finance
Budget of ten thousand four hundred one crore rupees

Niryat Disha

Focus on non financial support such as skills market access technology and compliance assistance
Budget of fourteen thousand six hundred fifty nine crore rupees

This package arrives at a time when exporters face rising global uncertainty including tariff actions from major trading partners and ongoing supply chain shifts.

Expected Impact

The CGSE is expected to

Unlock easier credit access for MSME dominated export sectors
Shorten production cycles by ensuring smooth availability of working capital
Improve international price competitiveness
Enable exporters to enter new markets
Reduce reliance on high cost informal financing
Strengthen Indias foreign exchange reserves

By eliminating the need for collateral the scheme opens the door for thousands of smaller exporters who previously found formal credit inaccessible.

The Credit Guarantee Scheme for Exporters is more than a financing facility. It is a strategic intervention designed to secure the future of Indias export growth. With global markets undergoing rapid changes this scheme gives Indian exporters the liquidity and confidence needed to compete expand and thrive

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