Credit Assistance for E-Commerce Exporters under Export Promotion Mission (EPM) - Niryat Protsahan: A Legal and Policy Analysis

I. Introduction

The Government of India, through the Department of Commerce, Ministry of Commerce and Industry, acting via the Directorate General of Foreign Trade (DGFT), issued Trade Notice No. 31/2025-26 dated 6 March 2026 to operationalise the Credit Assistance for E-Commerce Exporters intervention under the Export Promotion Mission (EPM) - Niryat Protsahan.

The initiative represents a significant regulatory and policy measure designed to enhance the availability of working capital financing for Micro, Small and Medium Enterprises (MSMEs) engaged in cross-border e-commerce exports. The scheme introduces a structured credit guarantee and interest subvention mechanism intended to mitigate credit risk for lending institutions and facilitate export-led growth in the MSME sector.

The Trade Notice has been issued pursuant to the policy framework of the **Foreign Trade Policy 2023 and in exercise of powers conferred under the **Foreign Trade (Development and Regulation) Act, 1992. The intervention is proposed to be implemented initially on a pilot basis through the Export-Import Bank of India (Exim Bank) in coordination with the **National Credit Guarantee Trustee Company Limited (NCGTC).

II. Objective of the Intervention

The principal objective of the scheme is to enhance the accessibility of working capital to MSMEs operating within international value chains through digital commerce platforms. In particular, the intervention seeks to:

1. Enable MSME exporters to manufacture and procure goods in anticipation of international demand.
2. Facilitate inventory management for exporters utilising overseas warehouses or e-commerce export hubs.
3. Promote scalability of cross-border e-commerce exports by providing flexible credit support tailored to the fluctuating cash flow patterns characteristic of digital trade.

Through these mechanisms, the initiative aims to strengthen the participation of Indian MSMEs in global value chains and expand the country's digital export ecosystem.

III. Scope and Coverage

The intervention provides financial support in the form of credit guarantee cover and interest subvention on working capital facilities extended by eligible lending institutions.

The assistance applies to:

• Cash Credit facilities
• Overdraft facilities
• Other working capital instruments

extended by scheduled commercial banks and designated financial institutions to eligible MSME exporters.

Further, the financing extended under the intervention is eligible for interest subvention support subject to notified ceilings and compliance with the operational guidelines issued by the competent authority.

The scheme is restricted exclusively to MSMEs engaged in international value chains through e-commerce channels and operating under the regulatory framework of the Foreign Trade Policy.

IV. Eligibility Criteria

To qualify for credit assistance under the intervention, an enterprise must satisfy the following conditions:

1. Possession of a valid Importer-Exporter Code (IEC) issued by DGFT and not listed under the Denied Entity List.
2. Registration as an MSME with a valid Udyam Registration Number.
3. Engagement in cross-border e-commerce trade through postal or courier export channels or via recognised e-commerce marketplaces.
4. Demonstration of at least six months' export track record through postal or courier routes, or maintenance of inventory in overseas warehouses or E-Commerce Export Hubs (ECEHs).

Additionally, new MSMEs possessing at least one year of domestic e-commerce operational experience may also be eligible under specified conditions.

Borrower accounts must be classified as standard assets, and entities with accounts previously categorised as Special Mention Account-2 (SMA-2) or Non-Performing Assets (NPAs) during the preceding two years are not eligible.

V. Types of Credit Facilities Supported

The scheme introduces two principal financing instruments:

1. Direct E-Commerce Credit Facility

This facility provides working capital financing to MSMEs engaged in direct e-commerce exports through postal or courier channels or those storing inventory in E-Commerce Export Hubs.

Key features include:

• Credit limit up to Rs. 50 lakh
• Guarantee cover up to 90%
• Maximum guarantee tenure of 365 days
• Annual guarantee fee of 0.5%

The credit limit may be determined based on the borrower's export track record or sales data derived from ECEH operations.

2. Overseas Inventory E-Commerce Credit Facility

This instrument provides financing to MSMEs maintaining inventory in overseas warehouses to facilitate quicker delivery and fulfilment in international markets.

Salient features include:

• Credit limit up to Rs. 5 crore
• Guarantee cover up to 75%
• Maximum guarantee tenure of 365 days
• Annual guarantee fee of 1%

The credit limit may extend up to 50% of the cost of inventory maintained abroad.

VI. Interest Subvention and Financial Assistance

Under the intervention, eligible MSMEs receive an upfront interest subvention of 2.75% on credit facilities sanctioned by partner lending institutions.

The scheme also prescribes a maximum annual subvention ceiling of Rs. 15 lakh per beneficiary MSME.

The notified interest subvention rates and guarantee coverage levels are subject to biannual review to ensure alignment with prevailing financial market conditions.

However, support under the intervention is not admissible for deemed exports or exports to Special Economic Zones (SEZs).

VII. Institutional Implementation Framework

The operational framework of the scheme assigns specific responsibilities to several institutional actors:

1. Exim Bank - Responsible for evaluating guarantee applications, conducting risk assessments, and issuing in-principle approvals for guarantee cover.
2. NCGTC - Acts as trustee of the E-Commerce Credit Guarantee Trust, managing the guarantee corpus and administering claim settlements.
3. Member Lending Institutions (MLIs) - Scheduled commercial banks or all-India financial institutions responsible for credit appraisal, sanction of loans, and monitoring borrower accounts.

The Government of India has established a dedicated E-Commerce Credit Trust Fund, whose corpus will be invested in liquid assets and augmented through guarantee fees and investment returns.

VIII. Governance Structure

A Sub-Committee on Trade Finance has been constituted to oversee the implementation of the intervention. The committee comprises representatives from:

• Ministry of MSME
• Department of Commerce
• DGFT
• Department of Financial Services
• Exim Bank
• NCGTC
• Export Credit Guarantee Corporation
• India Banks Association

The committee is mandated to:

• Recommend levels of interest subvention and guarantee coverage
• Identify regulatory bottlenecks affecting implementation
• Develop monitoring and performance evaluation mechanisms
• Facilitate stakeholder coordination and outreach

IX. Application and Approval Procedure

The scheme adopts a digital application mechanism through the DGFT portal.

The process involves the following steps:

1. Submission of an online declaration of intent by the applicant exporter.
2. Generation of a Unique Identification Number (UIN) by the DGFT system.
3. Application to a participating lending institution referencing the generated UIN.
4. Credit appraisal and sanction by the lending institution.
5. Submission of guarantee application by the lender to Exim Bank.
6. Risk assessment and in-principle approval by Exim Bank within three business days.
7. Final approval and issuance of guarantee cover by NCGTC upon payment of the prescribed guarantee fee.

X. Claim Settlement and Recovery Mechanism

In cases where a borrower defaults and the credit facility becomes a Non-Performing Asset, the lending institution may invoke the guarantee.

The following conditions govern claim settlement:

• Claims may be lodged after 90 days but within 360 days from the date of the account becoming NPA.
• The Trust will settle 80% of the claim within 30 working days, subject to submission of required documentation.
• The remaining 20% is released after completion of recovery proceedings or after a specified period.

Lending institutions continue to bear responsibility for recovery of outstanding dues and must remit recovered amounts to the Trust on a pro-rata basis.

XI. Exclusions and Compliance Restrictions

Certain categories of transactions are excluded from the scope of the intervention, including:

• Export of goods prohibited under Schedule II of the ITC (HS) Export Policy.
• Transactions involving countries subject to international sanctions.
• Trade in wildlife products regulated under CITES.
• Production or trade in banned substances such as ozone-depleting chemicals or restricted pesticides.
• Activities inconsistent with domestic law or international conventions.

These exclusions ensure alignment with global trade norms and regulatory compliance obligations.

XII. Conclusion

The Credit Assistance for E-Commerce Exporters initiative constitutes a targeted policy intervention aimed at strengthening the financial ecosystem supporting digital exports. By integrating credit guarantees, interest subvention, and a structured governance mechanism, the scheme addresses key financial constraints faced by MSME exporters operating in cross-border e-commerce markets.

The pilot implementation will facilitate institutional learning and policy refinement based on stakeholder feedback, thereby enabling the Government of India to design a scalable and sustainable framework for promoting e-commerce exports. If effectively implemented, the intervention has the potential to significantly expand the participation of Indian MSMEs in global digital trade and contribute to the broader objectives of export diversification and economic growth.