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Cabinet Approves Credit Guarantee Scheme for Exporters (CGSE) to Boost Global Competitiveness
Date: 12th November 2025
Source: PIB Delhi
Link: https://www.pib.gov.in/PressReleasePage?PRID=2189389
In a significant move to support Indias export sector and enhance its global competitiveness, the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the introduction of the Credit Guarantee Scheme for Exporters (CGSE). The scheme aims to provide 100% credit guarantee coverage for additional credit facilities extended by Member Lending Institutions (MLIs) to eligible exporters, including both MSMEs (Micro, Small, and Medium Enterprises) and non-MSMEs. The total support under the scheme is envisaged to be up to Rs. 20,000 crore.
Key Features of the Credit Guarantee Scheme for Exporters (CGSE)
- Collateral-Free Credit: One of the most critical features of the CGSE is the provision of collateral-free credit to exporters. This ensures that even smaller businesses, particularly MSMEs, can access the financing they need without the burden of providing security for loans. This support will help exporters maintain smooth business operations and improve cash flow.
- 100% Credit Guarantee: The scheme guarantees 100% credit coverage through the National Credit Guarantee Trustee Company Limited (NCGTC), reducing the risk for lenders and incentivizing them to extend additional credit to eligible exporters.
- Targeted Beneficiaries: The scheme is designed to benefit both MSME and non-MSME exporters across India, ensuring that businesses of all sizes can benefit from this financial support.
- Support for Market Diversification and Liquidity: By enhancing access to collateral-free credit, the scheme helps exporters diversify into new and emerging markets. This is particularly important as India seeks to expand its export footprint beyond traditional markets and tap into high-growth economies.
Implementation Strategy and Oversight
The Department of Financial Services (DFS), under the supervision of a Management Committee chaired by the Secretary of DFS, will oversee the scheme’s implementation. The National Credit Guarantee Trustee Company Limited (NCGTC) will manage the operational aspects of the scheme, ensuring seamless credit disbursements and effective risk management. The committee will track the progress of the scheme and ensure that it meets its targets of enhancing liquidity and supporting export growth.
Major Impact of the Scheme
- Enhanced Global Competitiveness: The CGSE is expected to significantly boost the global competitiveness of Indian exporters by providing the liquidity necessary for their expansion. As Indian businesses gain access to additional working capital, they will be better positioned to meet international demand, innovate, and offer competitive pricing in the global marketplace.
- Market Diversification: The scheme will facilitate the diversification of markets for Indian exporters, encouraging them to expand beyond their traditional markets and explore new, high-growth regions. This diversification is vital for reducing reliance on specific markets and mitigating risks associated with geopolitical and economic volatility.
- Boost to Employment: With increased liquidity and access to credit, Indian exporters are expected to scale up their operations, leading to greater employment opportunities. Export-oriented industries, especially MSMEs, which contribute significantly to India’s export value and employ millions of people, will benefit the most.
- Support for Aatmanirbhar Bharat: The scheme aligns with the Government’s vision of an Aatmanirbhar Bharat (Self-Reliant India), empowering Indian businesses to compete globally and reduce dependence on imports. By strengthening the export sector, the scheme contributes to India’s economic self-sufficiency and helps in achieving broader macroeconomic stability.
Background and Rationale
Exports have long been a crucial pillar of the Indian economy. As of FY 2024-25, exports contribute nearly 21% of India’s GDP, playing a vital role in supporting the country’s foreign exchange reserves. The export sector, particularly in industries like manufacturing, agriculture, and textiles, directly and indirectly employs over 45 million people.
MSMEs play a particularly critical role in the export ecosystem, accounting for nearly 45% of total exports. Their growth and competitiveness are key to achieving sustained export growth and strengthening India’s position in the global economy. However, many MSMEs face challenges in accessing credit and managing cash flow, especially in a competitive global market. The Credit Guarantee Scheme for Exporters (CGSE) seeks to address these challenges by providing the necessary liquidity and financial support.
Supporting India’s Export Target of USD 1 Trillion
The scheme is a proactive step by the Government of India to help achieve the ambitious target of reaching USD 1 trillion in exports. By providing additional liquidity support to exporters, the scheme will help maintain the momentum of export growth, making it easier for businesses to navigate economic disruptions, adapt to market changes, and scale operations to meet growing international demand.
Conclusion
The Credit Guarantee Scheme for Exporters (CGSE) is a landmark initiative that promises to unlock new opportunities for Indian exporters, particularly MSMEs, by providing them with easier access to credit and liquidity. With a focus on global competitiveness, market diversification, and supporting India’s Aatmanirbhar Bharat vision, the scheme is poised to play a key role in boosting India’s export performance and contributing to the country’s long-term economic growth. By helping Indian businesses access the financing they need, the Government is ensuring that Indian exporters remain competitive on the global stage, thus fostering sustainable economic growth and job creation across the country.