The government’s ₹45,000-crore package for export promotion is its latest attempt to support a sector facing unprecedented geopolitical shocks. The package includes a ₹25,000-crore Export Promotion Mission, which primarily is a consolidation of a few existing schemes to ensure that the nation can respond swiftly to global trade challenges and evolving exporter needs. It focuses on better access to trade finance for smaller enterprises, improved market access and visibility for Indian products, and enhanced export readiness through compliance, packaging, and certification support. The scheme is also looking to boost exports from non-traditional districts and sectors. It integrates existing export support measures such as the Interest Equalisation Scheme and the Market Access Initiative to align them with contemporary requirements. The other part of the package—Credit Guarantee Scheme for Exporters—will provide government cover to exporters, enabling their access to ₹20,000 crore of additional credit.
These two initiatives, along with the recent extension of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, should partially shield exports from the multiple headwinds they face—but only if they are rolled out on time and implemented well. The Export Promotion Mission, initially announced in the Union budget to last for six years up to 2030-31, is yet to be rolled out eight months into the current financial year. The mission’s goal of encouraging exports from non-traditional districts is ambitious, but worth pursuing to broaden the export base and benefit newer districts. It can also serve as a logical extension of the ‘One District, One Product’ scheme.
The laudable larger goal of both parts of the package—enabling smaller exporters’ easier access to credit—should give this hard-hit, crucial segment a fresh lease of life. The schemes for credit guarantee and interest equalisation, which is now part of the mission, meets the need of the moment. However, experts have questioned the sufficiency of the funds allocated. The amount of ₹25,000 crore for six years—amounting to an annual allocation of a bit over ₹4,000 crore—may not be enough. The interest equalisation scheme alone cost more than ₹3,500 crore last year. The learning from RoDTEP—that once launched, there should not be too much tinkering with a scheme—should also be borne in mind. It’s a mission well begun, but its success will depend on how it hits the ground.