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Support for Alternative Trade Instruments intervention under the Export Promotion Mission (EPM) – NIRYAT PROTSAHAN

The Government of India has launched the Support for Alternative Trade Instruments intervention under the Export Promotion Mission (EPM) – NIRYAT PROTSAHAN. This initiative is designed to strengthen access to export finance for MSMEs by providing structured support for alternative trade finance mechanisms, with an initial focus on export factoring.

Below is a brief note on the benefits, eligibility, and key conditions:

Nature of Assistance: The government provides financial support in the form of interest subvention or equivalent cost support on the interest cost element of eligible export factoring transactions.

Subvention Rates:

Notified Rate: The subvention rate is fixed at 2.75%.
Review Mechanism: This rate is reviewed bi-annually (typically in March and September) based on global factoring costs and risk-free reference rates.
Maximum Limit: A cumulative maximum subvention of ₹50 lakh per MSME per financial year. For FY 2025-26, this ceiling applies in full regardless of the sanction date.

Eligible Expenditures: Support is available for interest costs related to:

Factoring Arrangements: Includes both recourse and non-recourse factoring.
Currency: Transactions can be denominated in Indian Rupees (INR) or freely convertible foreign currencies.
Authorized Entities: Factoring must be entered into with entities regulated by the Reserve Bank of India (RBI) or the International Financial Services Centres Authority (IFSCA).

Eligibility Criteria

MSMEs: Must be involved in international value chains, hold a valid active Importer-Exporter Code (IEC) (not on the Denied Entity List), and have a valid Udyam Registration Number.
Tariff Lines: Support is restricted to exports under a notified positive list of tariff lines (defined at the HSN six-digit level in Annexure-V).
Exclusions: Support is not admissible for “deemed exports” (as per Chapter 7 of the FTP) or exports to Special Economic Zones (SEZ).
Effective Date: Only export factoring arrangements entered into on or after February 20, 2026, qualify for support.
Graduating MSMEs: Entities that grow out of the MSME category remain eligible for three years from the date of re-classification.

Application & Claim Process: The scheme is operationalized through a designated online portal:

Stage I: Declaration of Intent: Prior to availing the factoring facility, exporters must submit an online declaration of intent to generate a Unique Identification Number (UIN). This UIN is factor-specific and valid until the end of the financial year.
Stage II: Factoring & Claims: The exporter approaches the factor with the UIN to initiate the transaction. Factors then submit IEC-wise subvention claims online on a monthly basis.

Disbursement: After approval by the competent authority (DGFT), the subvention amount is credited directly to the bank account linked to the exporter’s IEC

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