Indian Government Launches ₹4,531 Crore Export Support Scheme

The Indian government has initiated a robust support scheme worth ₹4,531 crore aimed at enhancing the country’s export competitiveness. Launched on Wednesday, this Market Access Support (MAS) initiative will assist exporters in participating in international fairs, exhibitions, and buyer-seller meetings. This comes at a critical time as exporters face challenges from increasing tariffs in major markets, particularly the United States.

The MAS scheme represents the first operational component of a larger export promotion mission, which has an overall budget of ₹25,060 crore. According to Ajay Badhoo, Director General of Foreign Trade, the remaining components of this mission are set to be rolled out by the end of January 2024.

Under the MAS, the allocated funds will be distributed over a six-year period from 2025 to 2031. For the fiscal year 2025-26, ₹500 crore has been earmarked. Of this amount, ₹330 crore will address pending dues from the previous Market Access Initiative (MAI), which had operated as a standalone program until last year.

The MAS scheme will provide structured financial and institutional support for a variety of activities, including Buyer-Seller Meets (BSMs), participation in international trade fairs, and Mega Reverse Buyer-Seller Meets (RBSMs) held in India. The government will cover 60 percent of the costs for each approved event, while the remaining 40 percent will be funded by the private sector. Notably, for priority sectors, government support can increase up to 80 percent.

The initiative specifically reserves 35 percent of participation slots in BSMs and trade delegations for micro, small, and medium enterprises (MSMEs). Priority sectors identified under this scheme encompass agriculture, handicrafts, leather, sports goods, telecommunications, defence, and several others.

New Innovations and Feedback Mechanisms

Additionally, a new component focusing on proofs-of-concept and product demonstrations for overseas buyers, particularly in technology-intensive sectors, will soon be introduced. This initiative was developed in response to requests from the ministries of telecommunications, information technology, and electronics.

Badhoo highlighted the implementation of mandatory online feedback mechanisms for exporters participating in supported events. These mechanisms will evaluate parameters such as buyer quality, business leads generated, and market relevance. The guidelines for the MAS are expected to evolve based on this feedback, ensuring that the program effectively meets the needs of exporters.

Moreover, a proactive calendar of significant market access events spanning three to five years will be prepared and approved in advance. This planning aims to provide exporters and organizing agencies with the foresight necessary to ensure effective participation and continuous market development efforts.

The comprehensive export promotion mission, approved by the Indian Cabinet in November 2023, comprises two major components: Niryat Protsahan and Niryat Disha. Within the total budget of ₹25,060 crore, ₹10,401 crore is allocated for Niryat Protsahan, which focuses on reducing credit costs for exporters, while ₹14,659 crore is designated for Niryat Disha.

Niryat Protsahan includes various measures such as interest subvention for MSME exporters, which is projected to cost approximately ₹5,000 crore. Additional support will cover collateral guarantees, export factoring, and credit enhancements.

In a positive development for the Indian economy, exports rebounded by 19.37 percent in November 2023, reaching a six-month high of $38.13 billion. This resurgence followed a contraction in October and was driven by increased shipments of engineering and electronics goods. Consequently, the trade deficit has narrowed to a five-month low of $24.53 billion, according to official data.

This proactive approach by the Indian government aims to bolster the country’s export capabilities, particularly as global trade dynamics continue to evolve.