Union Cabinet Approves Credit Guarantee Scheme for Exporters (CGSE)

The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the introduction of the Credit Guarantee Scheme for Exporters (CGSE) to provide enhanced credit support to India’s exporting community, including Micro, Small, and Medium Enterprises (MSMEs).

Key Features of the Scheme

• The Credit Guarantee Scheme for Exporters (CGSE) aims to provide 100% credit guarantee coverage through the National Credit Guarantee Trustee Company Limited (NCGTC).
• The guarantee will be extended to Member Lending Institutions (MLIs) for offering additional credit facilities up to ₹20,000 crore to eligible exporters, including MSMEs.
• The scheme will be implemented by the Department of Financial Services (DFS), Ministry of Finance, through NCGTC.
• A Management Committee, chaired by the Secretary, DFS, will monitor and oversee the implementation and progress of the scheme.

Objectives

• To enhance the global competitiveness of Indian exporters.
• To support diversification into new and emerging export markets.
• To strengthen India’s export ecosystem by facilitating easier access to credit, particularly for MSMEs.

Economic Context

• Exports account for nearly 21% of India’s GDP (FY 2024–25) and are a critical pillar of the Indian economy.
• Export-oriented industries provide direct and indirect employment to over 45 million people.
• MSMEs contribute nearly 45% of India’s total exports.
• Sustained export growth is essential for maintaining foreign exchange reserves, current account balance, and macroeconomic stability.

Significance

• Strengthens India’s export financing framework by de-risking lending institutions.
• Encourages credit flow to small exporters who face collateral and guarantee constraints.
• Aligns with India’s goal of achieving $2 trillion in exports by 2030 under the Foreign Trade Policy 2023.

Source: PIB