To strengthen export competitiveness and ease financing constraints for exporters, the Government of India has launched an Interest Subvention Scheme for pre- and post-shipment export credit under the Export Promotion Mission (EPM) – Niryat Prothsahan. The scheme has been introduced on a pilot basis and is operationalised through trade notices issued by the Directorate General of Foreign Trade (DGFT). The Reserve Bank of India (RBI) has, in turn, issued instructions to regulated lending institutions for effective implementation.

Key Provisions

• The scheme provides interest subvention on eligible pre-shipment and post-shipment export credit.
• Applicability extends to scheduled commercial banks (excluding RRBs), urban co-operative banks, state co-operative banks, and all-India financial institutions.
• Lending institutions must extend the benefit strictly in accordance with the scheme guidelines issued under the EPM framework.
• Interest subvention claims must be submitted as per the prescribed procedures and timelines.
• Extension of benefits remains subject to compliance with existing RBI regulatory instructions.

  Practical Implications for Exporters and Banks

• Eligible exporters may benefit from reduced borrowing costs on export credit facilities, improving cash flow and price competitiveness.
• Banks and financial institutions are required to establish internal controls to ensure that subvention is extended only to qualifying export credit.
• Accurate identification of eligible transactions and disciplined claim processing will be critical to avoid regulatory and financial exposure.
• Exporters should coordinate closely with their lenders to understand documentation and eligibility requirements under the scheme.

   Compliance and Governance Considerations

• Lending institutions bear responsibility for ensuring scheme adherence and regulatory compliance.
• Incorrect extension of interest subvention or non-compliant claims may attract supervisory scrutiny.
• Robust audit trails and periodic internal reviews will be essential to demonstrate adherence to both EPM guidelines and RBI instructions.

   Key Takeaways

• The interest subvention scheme represents a targeted policy measure to support exporters through concessional credit.
• Successful implementation depends on strict eligibility checks, accurate claim submission, and regulatory discipline by lenders.
• Exporters and finance professionals should proactively assess how the scheme integrates with existing export financing arrangements.