Commerce Dept pushing to expedite export promotion mission amidst global uncertainty

India’s goods exports remained flat in FY2025 at $437.4 billion as continued global slowdown and US President Donald Trump’s reciprocal tariffs affected orders
| Photo Credit:
VIPIN CHANDRAN

To lend support to exporters as they face greater global uncertainty, the Commerce Department is trying to expedite Expenditure Finance Committee (EFC) clearance for the export promotion mission announced in Budget 2025 with an annual allocation of ₹2,240 crore.

The mission will include a number of schemes, such as interest equalisation and market promotion funds for exporters, especially taking care of the needs of the MSME sector, sources said.

“The Commerce Department is seeking a term of five years for the exports promotion mission as continuity in the schemes announced under the mission will provide stability to exporters in the uncertain global environment. Now it is for the EFC to decide what the term of the scheme will be,” an official tracking the matter told businessline.

India’s goods exports remained flat in FY25 at $437.4 billion as continued global slowdown and US President Donald Trump’s reciprocal tariffs affected orders.

The EFC is a committee that examines the financial aspects of proposed projects or schemes before they are approved. The export promotion mission will also help in promoting factoring services for exporters to reduce their dependence on traditional banks and also promote new exporters, new products and new markets.

Exporters are eager for an early roll-out of the export promotion mission as the popular interest equalisation scheme (IES), under which exporters were extended loans at subsidised rates, was discontinued in December last year. The scheme is to be reinstated as part of the mission.

With Trump’s reciprocal tariff announcements destabilising global trade, exporters have sought an interest subvention of 5 per cent against 3 per cent extended earlier.

“The EFC will take a final call on the subvention rate based on the interest rate in peer countries. Interest equalisation is actually not an incentive but an attempt to provide an equal playing field to exporters,” the official said.

The export promotion mission will also take into consideration factors such as giving relief to MSMEs from collateral. 

“In spite of an export order, an MSME exporter may not be able to take it because he may not have the resources to pay for collateral and hence get deprived of credit. How does one alleviate that? The mission will try to address such problems,” the official said.

The mission will also subsume the Market Access Initiative (MAI) scheme, which assists in the enhancement of exports through accessing new markets or through increasing the share in the existing markets.

“While the US or any other country will not be specifically a part of the MAI component for market promotion, there is nothing that stops the government to make allocations for countries or products where it feels there is a need for assistance,” the official said.

Published on April 18, 2025