Credit Guarantee Scheme For Exporters (CGSE), 2025: 2026 Implementation And Export Credit Support

Policy Update

Aditya Chavan

Background

Exporters finance shipments before they are paid, so access to working capital shapes how much they can produce and sell abroad. The Credit Guarantee Scheme for Exporters (CGSE) was approved by the Union Cabinet on 12 November 2025 to provide collateral-free credit support to exporters, including micro, small and medium enterprises (MSMEs). Its stated aims are to strengthen liquidity, support diversification into new and emerging markets and improve global competitiveness. The Department of Financial Services (DFS) in the Ministry of Finance implements it through the National Credit Guarantee Trustee Company Limited (NCGTC), which gives a 100 per cent guarantee to member lending institutions (MLIs) on additional credit of up to Rs 20,000 crore (Press Information Bureau, 2025a).

The release gives the reasons in terms of the export economy. Exports were about 21 per cent of gross domestic product in 2024–25, export-oriented industries directly and indirectly employ over 45 million people, and MSMEs contribute nearly 45 per cent of exports (Press Information Bureau, 2025a). The trade backdrop since then has been mixed. Exports of goods and services in 2025–26 were estimated at US$ 860.09 billion against US$ 825.26 billion a year earlier, with merchandise exports up 0.93 per cent (Press Information Bureau, 2026b).

In February 2026, India and the United States announced a framework for an interim trade agreement under which the United States would apply a reciprocal tariff of 18 per cent on originating Indian goods (Press Information Bureau, 2026e).

CGSE sits within a wider export-support package. The Export Promotion Mission, with an outlay of Rs 25,060 crore from 2025–26 to 2030–31, includes a financial component, Niryat Protsahan, covering interest subvention, export factoring, collateral support and credit enhancement for new or high-risk markets (Press Information Bureau, 2025b, 2025c). This article reviews the design of CGSE and its early implementation. The official sources reviewed report progress only up to 2 January 2026, so the article does not assess the scheme’s outcome.

Functioning & Methodology

CGSE works through a trust fund, the Credit Guarantee Fund for Exporters, managed by NCGTC. Lenders may sanction additional credit of up to 20 per cent of an exporter’s sanctioned working-capital limits, up to Rs 50 crore per borrower, and the guarantee covers 100 per cent of that additional credit. Eligible borrowers are exporters already on a lender’s books on 30 September 2025, and new borrowers are not covered (National Credit Guarantee Trustee Company Limited, 2025). Neither NCGTC nor the lender may charge a guarantee fee, a processing fee or a pre-payment penalty, and lenders may not seek fresh collateral or personal or corporate guarantees (National Credit Guarantee Trustee Company Limited, 2025; Press Information Bureau, 2026d).

The process runs through two portals. An exporter applies on the Jan Samarth portal, and the lender assesses the application, sanctions the loan and marks it for CGSE support. The lender then lodges a guarantee application on the NCGTC portal, which generates a guarantee number (National Credit Guarantee Trustee Company Limited, 2025). Lenders may price the loan at 1 per cent below their existing fund-based working-capital facilities, but not below the benchmark rate. If an account becomes a non-performing asset, NCGTC pays 75 per cent of the amount in default within 30 days of a complete claim, and the balance is claimed after recovery (National Credit Guarantee Trustee Company Limited, 2025).

The scheme is time-bound. It became operational on 1 December 2025 and is valid until 31 March 2026 or until guarantees of Rs 20,000 crore have been issued, whichever is earlier (Press Information Bureau, 2026a). A management committee chaired by the Secretary, DFS, oversees implementation (Press Information Bureau, 2025a). The analysis below draws on the Cabinet release, the NCGTC guidance and the progress figures published by the Press Information Bureau.

Key Findings

Table 1 sets out the main features of the scheme as published.

Table 1

Key Features of the Credit Guarantee Scheme for Exporters

Source: Compiled by the author from the Press Information Bureau and NCGTC documents cited in the table.

The first month of operation produced a large volume of applications. By 31 December 2025, lenders had received 1,788 applications worth Rs 8,599 crore and sanctioned 716 of them, worth Rs 3,141 crore (Press Information Bureau, 2026a). By 2 January 2026, applications had risen to 1,840 worth Rs 8,764.81 crore, and 774 applications worth Rs 3,361.83 crore had been sanctioned (Press Information Bureau, 2026d). Figure 1 sets these figures against the Rs 20,000 crore ceiling.

Figure 1

CGSE Applications and Sanctions against the Scheme Ceiling, as on 2 January 2026

Source: Press Information Bureau (2025a, 2026d).

Using these figures, the author calculates that applications equalled about 44 per cent of the ceiling and sanctions about 17 per cent. Sanctions were about 38 per cent of the value of applications and about 42 per cent of their number. The average application was about Rs 4.76 crore and the average sanction about Rs 4.34 crore. The releases do not say why the remaining applications had not been sanctioned, and the figures count lender sanctions, not guarantees issued by NCGTC, so the share of the ceiling actually used cannot be read from them.

Figure 2

Timeline of the Credit Guarantee Scheme for Exporters, 2025–2026

Source: Press Information Bureau (2025a, 2026a, 2026d); National Credit Guarantee Trustee Company Limited (2025).

A related change came in March 2026. On 21 March the Government modified the Mutual Credit Guarantee Scheme for MSMEs, a separate scheme under which NCGTC gives lenders a 60 per cent guarantee on credit of up to Rs 100 crore for machinery and equipment. For exporters, the modified scheme covers guaranteed loans of up to Rs 20 crore with a 75 per cent guarantee on the amount in default. It requires the exporter to be profitable and to have exported at least 25 per cent of sales turnover in each of the previous three financial years (Press Information Bureau, 2026c). This scheme finances machinery, whereas CGSE finances working capital.

Policy Significance

CGSE addresses a different problem from the tax-refund schemes that support exporters. Instruments such as the Remission of Duties and Taxes on Exported Products return embedded taxes after export, whereas CGSE gives exporters access to working capital before and during production. By guaranteeing the additional credit in full, the scheme moves credit risk on these loans from lenders to the guarantee fund. That is the author’s reading of the 100 per cent guarantee; the releases describe it as a means of enabling collateral-free credit (Press Information Bureau, 2025a).

The scheme is one of several measures aimed at exporter liquidity. The Export Promotion Mission lists collateral support and credit enhancement for new or high-risk markets among its financial interventions (Press Information Bureau, 2025c). The Reserve Bank of India also allowed a moratorium on repayments falling due between 1 September and 31 December 2025, and extended export credit tenure to 450 days for credit disbursed up to 31 March 2026 (Press Information Bureau, 2025c). CGSE adds new lending on top of relief for existing dues.

The scheme also reflects a focus on MSMEs, which contribute nearly 45 per cent of exports (Press Information Bureau, 2025a). It covers MSME and non-MSME exporters and both direct and indirect exporters (Press Information Bureau, 2026a, 2026d). The sources reviewed do not define indirect exporters beyond the Scheme Guidelines, which the FAQ cites (National Credit Guarantee Trustee Company Limited, 2025).

Emerging Issues

The first issue is the short window and the lack of outcome data. The scheme was valid until 31 March 2026 or until Rs 20,000 crore of guarantees were issued (Press Information Bureau, 2026a). The official sources reviewed report no figures after 2 January 2026 and do not state whether the window was closed, filled or extended. Without a closing report, the scheme’s reach cannot be judged.

The second issue is the gap between applications and sanctions. On 2 January 2026, sanctions were about 38 per cent of the value of applications (Press Information Bureau, 2026d, author’s calculation). The sources do not break the gap down by reason, lender, sector or exporter size, so it is not possible to tell whether the remainder was pending, declined or ineligible.

The third issue is eligibility. The scheme covers only exporters already borrowing from a lender on 30 September 2025 (National Credit Guarantee Trustee Company Limited, 2025). Exporters that were not then on a lender’s books, including new entrants, fall outside it. The FAQ refers to thresholds of 5 and 20 per cent of exports calculated on free-on-board values and to the treatment of goods shipped to the United States through a third country, but it leaves the full conditions to the Scheme Guidelines (National Credit Guarantee Trustee Company Limited, 2025). The public releases do not set these conditions out.

The fourth issue is the contingent cost. A 100 per cent guarantee with a 75 per cent interim claim payment means that defaults would fall on the guarantee fund (National Credit Guarantee Trustee Company Limited, 2025). The releases reviewed do not state any provision for claims or report claims data, so the fiscal exposure cannot be assessed from them.

Way Forward

The findings point to a set of steps that would make CGSE easier to evaluate and better targeted. These are the author’s recommendations drawn from the evidence above.

1. Publish a closing report for the 2025–26 window. It should state how many applications were received, sanctioned and guaranteed, the amount of guarantees issued against the Rs 20,000 crore ceiling, and whether the window was closed or extended.

2. Report data by lender, state, sector and exporter size. A breakdown of MSME and non-MSME exporters, and of direct and indirect exporters, would show whether the scheme reached the groups it was designed for.

3. Explain the gap between applications and sanctions. A summary of the main reasons for non-sanction would help exporters prepare applications and show whether eligibility rules, lender practice or documentation caused the gap.

4. Review the borrower cut-off. If a similar window opens again, a more recent reference date, or a route for exporters that were not then borrowers, would widen reach, subject to credit risk.

5. Track the stated objective of market diversification. The scheme aims to support new and emerging markets (Press Information Bureau, 2025a), but the progress figures do not show where the credit was used. Linking Jan Samarth data with the Export Promotion Mission platform run by the Directorate General of Foreign Trade could measure this (Press Information Bureau, 2025c).

6. Commission an independent evaluation after a full cycle. A study of working-capital availability, export performance, non-performing assets and claims paid would show whether the guarantee changed lending decisions and what it cost.

Taken together, these steps point to one priority: publishing enough data for CGSE to be judged on what it delivered to exporters and what it cost, not only on what was approved.

Conclusion

The Credit Guarantee Scheme for Exporters was set up as a time-bound response to exporters’ working-capital needs, with a 100 per cent guarantee on additional credit of up to Rs 20,000 crore (Press Information Bureau, 2025a). By 2 January 2026, lenders had received 1,840 applications worth Rs 8,764.81 crore and sanctioned 774 of them, worth Rs 3,361.83 crore (Press Information Bureau, 2026d). These figures show early demand and lender activity. They do not show the value of guarantees issued, the sectors or markets reached, or the claims that followed.

The scheme was open only to exporters already borrowing on 30 September 2025, and it was valid until 31 March 2026 or until the ceiling was reached (National Credit Guarantee Trustee Company Limited, 2025; Press Information Bureau, 2026a). On the available evidence, whether CGSE improved exporters’ access to credit remains open. The reporting and evaluation steps outlined above would be needed to answer it.

References

National Credit Guarantee Trustee Company Limited. (2025, December 1). Frequently asked questions (FAQs) on Credit Guarantee Scheme for Exporters (CGSE) [FAQ document]. Department of Financial Services, Ministry of Finance, Government of India.https://www.ncgtc.in/content/products/0/20251201/CGSE_FAQs_01_12_2025_194c3f8a28.pdf

Press Information Bureau. (2025a, November 12). Cabinet approves Credit Guarantee Scheme for Exporters (CGSE) [Press release]. Government of India.https://www.pib.gov.in/PressReleasePage.aspx?PRID=2189389&reg=48&lang=2

Press Information Bureau. (2025b, November 12). Cabinet approves Export Promotion Mission to strengthen India’s export ecosystem with an outlay of Rs.25,060 crore [Press release]. Government of India.https://www.pib.gov.in/PressReleasePage.aspx?PRID=2189383&reg=3&lang=2

Press Information Bureau. (2025c, December 6). Export Promotion Mission: A unified framework for strengthening India’s export competitiveness [Press release]. Government of India.https://www.pib.gov.in/PressReleasePage.aspx?PRID=2199733&reg=3&lang=1

Press Information Bureau. (2026a, January 1). Credit Guarantee Scheme for Exporters (CGSE) made operational through Jan Samarth Portal w.e.f. 1 December 2025 [Press release]. Ministry of Finance, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2210599&reg=3&lang=1

Press Information Bureau. (2026b, April 15). The cumulative exports (merchandise & services) during FY 2025-26 (April-March) is estimated at US$ 860.09 Billion, as compared to US$ 825.26 Billion in FY 2024-25 (April-March), an estimated growth of 4.22% [Press release]. Ministry of Commerce & Industry, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2252272&reg=3&lang=1

Press Information Bureau. (2026c, March 21). Government modifies Mutual Credit Guarantee Scheme to support MSME manufacturers and exporters in line with Budget 2025-26 [Press release]. Ministry of Finance, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2243388&reg=48&lang=2

Press Information Bureau. (2026d, January 10). Ministry of Finance year ender 2025: Department of Financial Services [Press release]. Ministry of Finance, Government of India.https://www.pib.gov.in/PressReleasePage.aspx?PRID=2213154&reg=1&lang=1

Press Information Bureau. (2026e, February 7). United States-India joint statement [Press release]. Ministry of Commerce & Industry, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2224783&reg=3&lang=2

About the Contributor

Aditya Chavan is an Economics undergraduate at Symbiosis School of Economics, Pune, with research interests spanning public policy, MSME development, financial inclusion, and economic governance. His work focuses on analysing government policies and institutional reforms aimed at fostering inclusive and sustainable economic development.

Acknowledgement

The author is grateful to IMPRI – Impact and Policy Research Institute for the opportunity to prepare this policy update, and acknowledges the guidance and feedback received during the review process, which helped strengthen the quality of this article.

Disclaimer

The views expressed in this article are solely those of the author and do not necessarily reflect the views of IMPRI or any affiliated institution.

Reviewers:  Mahenoor Imam and Shiva Karthik

Read more at IMPRI:

Menstrual Hygiene Scheme (2011): From Subsidised Napkin Packs to Free Supply in Schools

Bharat Maritime Insurance Pool (BMIP), 2026