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- India Approves ₹20,000 Cr Collateral Free Credit Guarantee For Exporters: 100% Govt Backing To Offset 50% US Tariffs
New Delhi30 minutes ago
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The government has approved the Credit Guarantee Scheme (CGSE) to provide financial assistance to all small and big exporters of the country. The cabinet led by Prime Minister Narendra Modi took this decision today (November 12).
Under this, National Credit Guarantee Trustee Company Limited (NCGTC) will provide 100% credit guarantee, through which exporters will be able to get additional credit up to Rs 20,000 crore without any collateral (guarantee in lieu of loan).
NCGTC will give guarantee to the loan giving bank
This scheme will be implemented through the Department of Financial Services (DFS). NCGTC will provide guarantee to the lending banks or financial companies, so that they can easily give loans to eligible exporters. For this, a management committee will also be formed, which will be chaired by the Secretary of DFS. This committee will keep an eye on the progress of the scheme.
4 benefits of credit guarantee scheme
- The scheme will provide liquidity (cash) support to exporters.
- By getting a loan without guarantee, the operation of the business will be easier and smoother.
- MSME exporters, which account for about 45% of the total exports, will get a big relief from this.
- Market diversification will be easy, meaning we will be able to enter new emerging markets.
Currently 50% American tariff on Indian exports
America has imposed 50% tariff on Indian imports (these will be exports to India) from August this year, which is badly affecting MSME exporters. To counter this, the government has approved this credit guarantee scheme, which will help them in liquidity and market diversification.
Earlier, in August-September 2025 itself, the government had started planning a credit support and relief package to protect against the impact of American tariffs. This is a strategic step to keep the 1 trillion dollar (about 89 lakh crore) export target safe despite Trump’s tariffs.
More than 4.5 crore people are employed in export industries.
These exports are strong pillars of India’s economy. In the last financial year 2024-25, this was 21% of the GDP. Support MSMEs and small exporters and foreign exchange reserves.
More than 4.5 crore people are in direct-indirect employment in export-oriented industries. But additional financial assistance was required for market diversification i.e. making a place in the worldwide market and for global competition.
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