New Delhi. When US President Donald Trump has imposed 50 percent tariff on India, the government has started a scheme of Rs 45 thousand crore for the protection of its exporters. The government has approved two schemes worth Rs 45,000 crore to assist exporters. The aim of this initiative is to help exporters deal with the impact of high US duties.
According to the statement issued by the government, the Export Promotion Mission Scheme of Rs 25,060 crore aims to strengthen export competitiveness especially for MSMEs (Micro, Small and Medium Enterprises), first-time exporters and labour-intensive sectors. The second scheme of Rs 20 thousand crore is Credit Guarantee Scheme for Exporters (CGSE). It has been started to provide loans to exporters without any guarantee.
Talks going on about trade deal
President Donald Trump administration had imposed a heavy duty of 50 percent on Indian goods from August 27, due to which exports worth billions of dollars have been affected. Currently, India and America are also negotiating a bilateral trade agreement. The Export Promotion Mission (EPM) will be run for six years through two sub-schemes, Export Promotion and Export Direction. Rs 10,401 crore will be spent on export promotion, while Rs 14,659 crore will be spent on export direction.
Which sectors will benefit?
Giving information about the scheme, Information and Broadcasting Minister Ashwini Vaishnav said that this is a comprehensive mission and it will provide support to the entire export environment. Under the Mission, assistance will be provided on priority basis to areas affected by the recent global tariff increase. These sectors include textiles, leather, gems and jewellery, engineering goods and marine products. These sectors are facing challenges in the American market. Due to high tariffs, India’s merchandise exports to America declined by 11.93 percent to $5.46 billion in September.
What kind of help will there be in export promotion?
Export promotion will focus on improving access to affordable trade finance for MSMEs through various instruments such as interest subvention, sale of bills of lading of goods sold in the international market for ready cash (export factoring), credit facilities, credit cards for e-commerce exporters and credit enhancement support for diversification into new markets. However, the subsidized interest on the loan has not been disclosed yet.
What help in export direction?
Under the second plan export direction, focus will be on non-financial assistance that enhances competitiveness while helping in market readiness. This includes export quality and compliance support, international branding, packaging and participation in trade fairs, export warehousing and logistics and accurate information about trade and capacity building initiatives. National Credit Guarantee Trustee Company Ltd. has been constituted by the Ministry of Finance to provide 100 percent loan guarantee to the Credit Guarantee Scheme for Exporters (CGSE). (NCGTC) so that financial institutions can provide additional credit support to exporters including MSMEs.
Export target of 1,000 billion dollars
A management committee constituted under the chairmanship of the Secretary, Department of Financial Services will look into the progress and implementation of this scheme. The CGSE scheme is expected to enhance the global competitiveness of Indian exporters and support diversification into new and emerging markets. Facilitating collateral-free credit access under CGSE will strengthen liquidity, ensure smooth functioning and accelerate India’s progress towards achieving the $1 trillion export target. FIEO, the apex organization of exporters, has welcomed this scheme.
