Credit Guarantee Scheme for Exporters: Strengthening India's Export Ecosystem

India's Union Cabinet has approved the Credit Guarantee Scheme for Exporters (CGSE), a financial initiative designed to provide credit support to the nation's export sector. The scheme provides 100% credit guarantee coverage through the National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs), enabling them to extend additional credit facilities of up to Rs. 20,000 crore to eligible exporters, including both MSMEs and non-MSME entities.​

Scheme Overview and Structure

The CGSE delivers collateral-free credit support, meaning exporters do not need to pledge additional assets to secure new loans. The Department of Financial Services (DFS) will implement the scheme through NCGTC, with a management committee chaired by the Secretary of DFS overseeing progress and implementation. This institutional arrangement ensures coordinated oversight of fund disbursement and scheme operations.​

The financial allocation reflects the government's commitment to supporting exporters during periods of market expansion. According to official statements, NCGTC will require approximately Rs. 2,000 crore to facilitate the full credit guarantee cover of Rs. 20,000 crore, with existing trust fund resources contributing to this allocation.​

Benefits for MSME Exporters

MSME exporters gain direct advantages through enhanced access to working capital without collateral requirements. MSMEs currently account for nearly 45% of India's total exports and directly and indirectly employ over 45 million people across export-oriented industries. By removing collateral barriers, the scheme enables small and medium enterprises to secure additional credit for operational expenses, inventory management, and business expansion. This removes a significant obstacle for MSMEs, which traditionally face challenges in accessing working capital due to limited collateral availability. The scheme allows MSMEs to obtain additional term or working capital loans while maintaining focus on business operations and market expansion.​

Support Extended to Non-MSME Exporters

Non-MSME exporters similarly benefit from the CGSE through expanded credit accessibility without asset encumbrance. The scheme provides collateral-free credit support to larger export enterprises, enabling them to maintain operational continuity and pursue market diversification without pledging additional assets. Non-MSME exporters can use this facility to strengthen their financial position and respond to opportunities across new and developing markets.​

How the Scheme Functions

Multiple lending institutions participate as MLIs under the scheme, including Scheduled Commercial Banks, Scheduled Urban Co-operative Banks (SUCBs), and Non-Banking Financial Companies registered with the Reserve Bank of India. This institutional diversity ensures widespread accessibility for exporters across different banking relationships. Individual loans extended under the scheme carry a tenure of four years, including a one-year moratorium on repayment obligations.​

The scheme remains operational until March 31, 2026, or until guarantees equivalent to Rs. 20,000 crore have been issued, providing a defined timeframe for exporters to access these credit facilities.​

Impact on India's Export Sector

Exports account for nearly 21% of GDP in FY 2024-25 and contribute significantly to foreign exchange reserves and macroeconomic stability. Export-oriented industries directly and indirectly employ over 45 million people across the country. By providing collateral-free credit access, the scheme strengthens liquidity and ensures smooth business operations for exporters across the spectrum. This enables exporters to diversify into new and emerging markets, reducing reliance on established markets and enhancing overall sector resilience.​

The scheme supports India's progress toward achieving the USD 1 trillion export target and reinforces the nation's Aatmanirbhar Bharat (self-reliance) objectives. Enhanced financial support allows exporters to expand market reach and strengthen their operational capacity without additional asset constraints.​

The CGSE represents a direct government intervention providing collateral-free credit support to both MSME and non-MSME exporters. By removing financial barriers and ensuring liquidity, the scheme enables exporters to pursue growth and market diversification while contributing to broader economic objectives and export sector development.