What Happened
- The Ministry of Commerce and Industry launched seven new interventions under the Export Promotion Mission (EPM), a Rs 25,060 crore programme approved by the Union Cabinet for FY 2025-26 to FY 2030-31.
- Key measures include credit assistance for e-commerce exporters (up to Rs 50 lakh with 90% guarantee), overseas inventory credit (up to Rs 5 crore with 75% guarantee), and export factoring support (2.75% interest subvention for MSMEs).
- The FLOW scheme enables access to overseas warehousing facilities like Bharat Mart in Dubai, while LIFT provides freight reimbursement for exporters in North-Eastern and hilly regions.
- With these seven additions, 10 of the 11 proposed EPM interventions are now operational, representing a near-complete rollout of the mission.
Static Topic Bridges
Export Credit and Trade Finance in India
Export credit is a critical enabler for exporters, particularly MSMEs, who face higher borrowing costs and limited access to international banking channels. The RBI prescribes priority sector lending norms that include export credit as a priority category, and ECGC (Export Credit Guarantee Corporation of India) provides insurance and guarantee support.
- ECGC: Established in 1957, wholly owned by the Government of India; provides export credit insurance to banks and exporters
- Priority Sector Lending: Export credit is classified as a priority sector under RBI guidelines; banks must meet PSL targets of 40% of Adjusted Net Bank Credit (ANBC)
- Interest Equalization Scheme (IES): Provides pre-shipment and post-shipment export credit at concessional rates for MSME exporters and specific product categories; subvention of 2-3% on rupee export credit
- Trade Receivables Discounting System (TReDS): Electronic platform for financing trade receivables of MSMEs; three platforms — RXIL, M1xchange, Invoicemart
Connection to this news: The EPM's new e-commerce credit facility and export factoring support build on the existing ECGC and IES infrastructure, adding dedicated digital-first channels for small exporters who previously struggled to access formal trade finance.
E-Commerce Exports — Policy Framework
Cross-border e-commerce has emerged as a significant channel for MSME exports but operates under a distinct regulatory framework. The government has progressively liberalised e-commerce export procedures to reduce compliance burdens.
- Foreign Trade Policy 2023: Introduced specific provisions for e-commerce exports; raised the per-consignment value limit for courier shipments
- E-commerce export hubs: Designated at major airports and ports for streamlined customs clearance
- DGFT registration: E-commerce exporters must obtain an Importer Exporter Code (IEC) from the Directorate General of Foreign Trade
- Payment reconciliation: RBI simplified forex realisation norms for e-commerce exports, allowing settlement through international payment gateways
- India's e-commerce export potential: Estimated at $200-300 billion by 2030, currently under $10 billion
Connection to this news: The Direct E-Commerce Credit Facility under the EPM — offering up to Rs 50 lakh with 90% guarantee coverage — addresses the core bottleneck for e-commerce exporters: access to working capital without the collateral requirements of traditional bank lending.
Logistics Costs and India's Export Competitiveness
High logistics costs remain a structural impediment to India's export competitiveness. India's logistics costs as a percentage of GDP are estimated at 14-16%, compared to 8-10% in developed economies. The National Logistics Policy (NLP), launched in September 2022, aims to reduce this to globally competitive levels.
- National Logistics Policy (2022): Targets reduction of logistics costs to single-digit percentage of GDP; introduces Unified Logistics Interface Platform (ULIP)
- PM Gati Shakti National Master Plan (2021): Multimodal connectivity for infrastructure planning across 16 ministries; uses GIS-based platform
- Sagarmala Programme (2015): Port-led development; coastal shipping, inland waterways, port modernisation
- India's ranking on World Bank Logistics Performance Index (LPI 2023): 38th out of 139 countries (up from 44th in 2018)
- North-Eastern and hilly regions face 20-40% higher freight costs than mainland exporters
Connection to this news: The LIFT scheme directly addresses the geographic disadvantage of North-Eastern and hilly region exporters by reimbursing up to 30% of freight costs, while the FLOW scheme reduces delivery timelines through overseas warehousing closer to destination markets.
Key Facts & Data
- EPM total outlay: Rs 25,060 crore (FY 2025-26 to FY 2030-31)
- Interventions operational: 10 of 11 proposed
- E-Commerce Credit: Up to Rs 50 lakh, 90% guarantee coverage
- Overseas Inventory Credit: Up to Rs 5 crore, 75% guarantee, 2.75% interest subvention
- LIFT: 30% freight reimbursement, cap Rs 20 lakh per IEC per year
- INSIGHT: 50% of project costs (100% for government institutions)
- India's logistics cost as % of GDP: 14-16% (target: single-digit)
- India's LPI ranking: 38th globally (2023)