EXIM Bank to be implementing agency for interest subvention support for exporters: DGFT
The Directorate General of Foreign Trade announced that the Export-Import Bank of India (EXIM Bank) will become the implementing agency for interest subvention support to exporters
The transition from the Reserve Bank of India to EXIM Bank takes effect from 1 April 2026
EXIM Bank will manage all operational aspects of the scheme going forward, including portal management, verification of claims and settlement of reimbursements
The Reserve Bank of India will continue to process outstanding claims for the January-March 2026 quarter under the earlier arrangement, while eligibility criteria and benefit levels under the scheme remain unchanged
Interest Equalisation Scheme (IES) for Pre- and Post-Shipment Export Credit
The Interest Equalisation Scheme, first implemented from 1 April 2015, subsidises the interest rate that banks charge exporters on rupee-denominated pre-shipment and post-shipment export credit, lowering their cost of borrowing to make Indian exports more price-competitive internationally.
Key Details
- Banks extend the subsidised (equalised) interest rate to exporters upfront at the time of loan disbursement, and then claim reimbursement of the differential from the implementing agency
- Following RBI's notification of August 2024, the benefit is now largely restricted to MSME manufacturer-exporters, who receive a 3% interest equalisation on pre- and post-shipment rupee export credit
- Claims from non-MSME manufacturers and merchant exporters for shipments/credit beyond 30 June 2024 are no longer entertained, narrowing the scheme's coverage to MSMEs
- The scheme requires exporters to submit external-auditor certification to their bank to claim the benefit
The interest subvention scheme being transferred from RBI to EXIM Bank is this Interest Equalisation Scheme (now operating under the Export Promotion Mission's Niryat Protsahan component) — the administrative shift does not alter the underlying 3% MSME benefit structure.
EXIM Bank — India's Apex Export Credit Institution
The Export-Import Bank of India was established on 1 January 1982 under the Export-Import Bank of India Act, 1981, and began operations in March 1982 as the country's apex financial institution for financing, facilitating and promoting foreign trade — functioning as India's export credit agency (ECA).
Key Details
- Wholly owned by the Government of India, headquartered in Mumbai, under the administrative oversight of the Department of Financial Services, Ministry of Finance
- Distinct statutory mandate from the RBI: EXIM Bank finances and promotes trade directly (lines of credit, buyer's/supplier's credit, project exports), while the RBI is the monetary authority regulating banks and credit more broadly
- Comparable global counterparts: US EXIM Bank, China EXIM Bank, UK Export Finance — each a dedicated export credit agency separate from the central bank
- The shift of scheme administration to EXIM Bank aligns the interest subvention mechanism with an institution whose core mandate is export finance rather than monetary regulation
Moving implementation from the RBI (a monetary/banking regulator) to EXIM Bank (a dedicated trade-finance institution) is consistent with consolidating export-support administration under a specialised trade-finance body rather than the central bank.
Export Promotion Mission (EPM) and the Niryat Protsahan Sub-Scheme
The Union Cabinet approved the Export Promotion Mission with a total outlay of Rs 25,060 crore for FY 2025-26 to FY 2030-31, consolidating multiple export-support schemes into a unified, technology-driven, outcome-based framework implemented by the DGFT under the Ministry of Commerce and Industry.
Key Details
- EPM has two sub-schemes: Niryat Protsahan (affordable trade finance instruments, including interest subvention and credit guarantees) and Niryat Disha (non-financial support — compliance, branding, logistics, capacity building)
- Targets MSMEs, first-time exporters, labour-intensive sectors, and sectors facing tariff pressure in export markets
- Represents a "whole-of-government" consolidation of previously fragmented export schemes into a single digitally-enabled framework
- The interest subvention transition to EXIM Bank was decided at the fourth Steering Committee meeting on the scheme, reflecting EPM's institutional governance structure
The interest subvention scheme now transitioning to EXIM Bank operates as part of the Niryat Protsahan sub-scheme under EPM, linking this administrative change to the broader 2025 restructuring of India's export-support architecture.
- Transition effective date: 1 April 2026 (EXIM Bank takes over from RBI)
- RBI continues processing legacy claims for: January-March 2026 quarter
- Interest Equalisation Scheme launched: 1 April 2015
- Current MSME manufacturer-exporter benefit: 3% interest equalisation (per RBI notification, August 2024)
- EXIM Bank established: 1 January 1982, under the Export-Import Bank of India Act, 1981; operations began March 1982
- Export Promotion Mission outlay: Rs 25,060 crore (FY 2025-26 to FY 2030-31)