Amendments to Interest Subvention Scheme for Export Credit (2026).

The Government of India, through the Directorate General of Foreign Trade (DGFT), has issued Trade Notice No. 33/2025-26 dated 20 March 2026. This notice introduces important amendments to the Interest Subvention Support Scheme under the Export Promotion Mission (EPM) - Niryat Protsahan.

These changes aim to bring clarity, transparency, and better implementation of the scheme that supports exporters, especially MSMEs, by reducing the cost of export credit.

What is Interest Subvention?

Interest subvention means the government subsidizes part of the interest charged by banks on export loans. This helps exporters get loans at lower interest rates, making Indian exports more competitive globally.

Key Amendments Explained Simply

1. Alignment with RBI Rules

Export credit will be eligible for interest subvention only if it follows the guidelines of the Reserve Bank of India.

• The loan period and structure must comply with RBI rules.
• The applicable subsidy rate will be based on the date the loan is disbursed.

2. No Benefit for Bad Loans (NPA)

If a loan becomes a Non-Performing Asset (NPA):

• Interest subvention will stop from that date onward.
• No subsidy will be given for defaulted loans.

3. Limit on Multiple Bank Loans

If an exporter takes loans from multiple banks:

• The exporter must ensure total subsidy does not exceed Rs. 50 lakh per IEC.
• Banks may take a written undertaking from exporters to confirm this.

4. Mandatory UIN (Unique Identification Number)

A UIN is compulsory to avail the benefit.

Key rules:

• UIN must be generated before or on the loan disbursement date.
• If the exporter changes banks:
  • A new UIN must be generated.
  • Old UIN cannot be transferred.
• Without a valid UIN, no interest subvention will be granted.

5. Positive List of Eligible Products

The scheme applies only to products listed in the Positive List (HS Codes).

• No retrospective benefit for newly added items.
• Subvention applies only to loans disbursed after inclusion in the list.
• If a product becomes ineligible:
  • Existing pre-shipment loans remain eligible.
  • Post-shipment loans will not qualify thereafter.

6. Claim Process for Banks

Banks must follow an online process:

• Register on the DGFT portal.
• Submit claims using borrower UINs.
• Provide loan details and required data.
• Follow a structured workflow for reimbursement.

7. Early Loan Repayment

If a borrower repays the loan early:

• Interest subvention is allowed only for the actual period the loan was used.
• Banks must report early closure to RBI.

8. Fresh Credit and Top-Up Loans

If an existing loan is renewed with additional funds:

• Only the new (top-up) amount will get subsidy at the current rate.
• The old portion will continue at the previous rate.

9. Scheme Applicability Date

• Only loans disbursed on or after 2 January 2026 are eligible.
• Loans before this date are not covered.

10. UIN and Loan Timing Must Match

• Subvention starts from the loan disbursement date only if:
  • UIN is generated on the same date or earlier.
• If UIN is missing, the loan will not qualify.

11. IEC Verification

Exporter details (IEC - Import Export Code) are:

• Verified automatically on the DGFT portal.
• Can also be checked by banks via API systems.

Why These Changes Matter?

These amendments aim to:

• Prevent misuse of the scheme
• Ensure better tracking using UIN
• Improve coordination between banks and exporters
• Provide clear rules on eligibility and timelines

For exporters, especially MSMEs, this means:

• Better access to subsidized credit
• But also stricter compliance requirements

Conclusion

The revised guidelines under the Export Promotion Mission strengthen the interest subvention framework by making it more transparent, rule-based, and technology-driven. Exporters must now pay close attention to UIN generation, loan timing, and eligibility conditions to fully benefit from the scheme.