New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the introduction of the Credit Guarantee Scheme for Exporters (CGSE), aimed at providing 100% credit guarantee coverage through the National Credit Guarantee Trustee Company Limited (NCGTC). The move will enable Member Lending Institutions (MLIs) to extend additional collateral-free credit facilities of up to Rs 20,000 crore to eligible exporters, including those in the MSME sector.
The scheme will be implemented by the Department of Financial Services (DFS) through NCGTC. A management committee chaired by the Secretary of DFS will monitor and oversee its progress and implementation. The scheme is designed to improve access to credit for exporters, support liquidity, and help businesses diversify into new and emerging markets.
According to the government, the initiative is expected to enhance the global competitiveness of Indian exporters and strengthen the country’s position in the international trade arena. By enabling collateral-free credit access, the CGSE will ensure smoother business operations and provide critical support toward India’s goal of achieving USD 1 trillion in exports. The scheme will also contribute to employment generation and reinforce India’s broader vision of Aatmanirbhar Bharat.
Exports remain a vital driver of the Indian economy, accounting for nearly 21% of the GDP in FY 2024–25 and contributing significantly to foreign exchange reserves. Export-oriented industries collectively employ more than 45 million people, with MSMEs accounting for nearly 45% of total exports. Sustained export growth has played a key role in supporting India’s current account balance and maintaining macroeconomic stability.
The government’s move to introduce CGSE reflects the need to extend enhanced financial assistance and adequate time for exporters to explore new markets and improve their global competitiveness. The infusion of additional liquidity is expected to promote business expansion, encourage market diversification, and provide a stable framework for exporters to thrive in an increasingly competitive global environment.
BI Bureau
