Government Announces Seven-Pronged Strategy to Boost India's Export Competitiveness
The Indian government on Friday unveiled a comprehensive package of seven strategic measures designed to significantly enhance the country's export performance and strengthen global competitiveness. These initiatives form a critical component of the ambitious Rs 25,060 crore export promotion mission, with three of its ten proposed components having already been launched in January.
Financial Support for Digital Export Channels
In a major push to support exporters leveraging digital platforms, the commerce ministry has introduced targeted credit facilities backed by interest subvention and partial credit guarantees. The Direct E-Commerce Credit Facility will provide financial support of up to Rs 50 lakh with substantial 90 per cent guarantee coverage, offering crucial working capital to digital exporters.
Additionally, the Overseas Inventory Credit Facility will offer support of up to Rs 5 crore with 75 per cent guarantee coverage, complemented by an interest subvention of 2.75 per cent. This facility is subject to an annual ceiling of Rs 15 lakh per applicant, ensuring broad-based accessibility.
Promoting Alternative Trade Finance Solutions
To make export factoring more accessible as an affordable working capital solution for Micro, Small and Medium Enterprises (MSMEs), the government will provide an interest subvention of 2.75 per cent on factoring costs. This benefit applies specifically to eligible transactions conducted through Reserve Bank of India (RBI) or International Financial Services Centres Authority (IFSCA)-recognised entities.
Assistance under this scheme will be capped at Rs 50 lakh per MSME annually and will be processed through a streamlined digital claim mechanism to ensure maximum transparency and timely disbursal of funds.
Expanding Market Access and Compliance Support
Recognizing the challenges exporters face in accessing new or high-risk international markets, the government will support alternative trade instruments through shared-risk and credit enhancement mechanisms. These include Letters of Credit confirmation and negotiation facilities designed to mitigate financial risks.
Under the Trade Regulations, Accreditation and Compliance Enablement (TRACE) initiative, exporters will receive targeted support in meeting complex international requirements for testing, inspection, certification and conformity assessment. Partial reimbursement of 60 per cent under the Positive List and 75 per cent under the Priority Positive List will be provided for eligible expenses, subject to an annual ceiling of Rs 25 lakh per import export code (IEC).
Enhancing Logistics and Overseas Infrastructure
The ministry also announced the Facilitating Logistics, Overseas Warehousing and Fulfilment (FLOW) program, which will enable exporters to access sophisticated overseas warehousing and fulfilment infrastructure. This includes specialized e-commerce export hubs that are seamlessly integrated with global distribution networks.
Financial assistance of up to 30 per cent of approved project cost will be provided for a maximum duration of three years, subject to prescribed ceilings and MSME participation norms.
Addressing Geographical Disadvantages
For exporters operating from northeastern and hilly regions, the government introduced Logistics Interventions for Freight and Transport (LIFT) to specifically mitigate geographical disadvantages. This innovative scheme provides partial reimbursement of up to 30 per cent of eligible freight expenditure, capped at Rs 20 lakh per IEC per financial year.
Comprehensive Trade Intelligence Support
Financial assistance will also be extended under the Support for Trade Intelligence and Facilitation (INSIGHT) program, generally limited to 50 per cent of project cost. However, up to 100 per cent support will be available for proposals originating from central and state government institutions and Indian missions abroad, subject to notified ceilings.
Strategic Vision and Economic Context
Through these coordinated financial and ecosystem interventions, the government aims to achieve multiple strategic objectives: reducing the cost of capital for exporters, diversifying available trade finance instruments, improving compliance readiness, addressing persistent logistics challenges, and strengthening overseas market integration for MSMEs.
Launching these comprehensive measures, Commerce and Industry Minister Piyush Goyal emphasized their fundamental purpose: "empowering Micro, Small and Medium Enterprises (MSMEs) for global markets." He highlighted India's expanding network of Free Trade Agreements (FTAs), noting that nearly 70 per cent of global GDP and two-thirds of global trade are now accessible to India through nine concluded FTAs.
These agreements include the first tranche of the Bilateral Trade Agreement with the United States, providing preferential access across multiple sectors in 38 developed and emerging economies worldwide.
Emphasizing the inclusive nature of this export push, Goyal stated that "the benefits of global trade must reach every MSME, startup and entrepreneur." He explained that the mission specifically seeks to promote new products, services and exporters while enabling Indian businesses to access previously untapped markets.
The minister also revealed encouraging preliminary data, noting that India has recorded double-digit growth in merchandise exports during the first half of February.
Commerce Secretary Rajesh Agarwal elaborated on the practical implications, stating that these interventions would help exporters access new markets and promote exports of innovative products. He urged export promotion councils to prepare comprehensive communication packages to maximize the benefits from free trade agreements recently finalized by India.
Current Export Performance
According to official data released for the period April–January of the 2025–26 fiscal year, India's exports demonstrated resilience with a 2.22 per cent increase to $366.63 billion. During the same nine-month period, imports grew more substantially at 7.21 per cent to $649.86 billion, resulting in a trade deficit of $283.23 billion.
This comprehensive seven-measure package represents a strategic response to both current economic challenges and long-term export ambitions, positioning Indian businesses for greater success in increasingly competitive global markets.
