The old Interest Equalisation Scheme lapsed in Dec 2024. A new Interest Subvention Scheme launched in Jan 2026 — here's what MSME exporters get under it.
If you're an MSME exporter still budgeting around the old Interest Equalisation Scheme, it's worth knowing that scheme actually lapsed on 31 December 2024 — and a new one has taken its place.
What Changed
The Government of India launched a new Interest Subvention Scheme in January 2026 under the six-year Export Promotion Mission (also referred to as Niryat Protsahan). It's designed to do the same core job as the old scheme — make rupee export credit cheaper for MSME exporters — but with revised rates, eligibility and a DGFT-based application process instead of the earlier RBI/bank-routed mechanism.
The Numbers
- 2.75% per annum interest subvention on pre-shipment and post-shipment rupee export credit from eligible lending institutions
- Capped at ₹50 lakh per exporting firm per financial year
- Applies to exports under a positive list of notified HSN six-digit tariff lines — covering roughly 75% of India's tariff lines, with a deliberate focus on sectors where MSMEs have high participation
- Restricted or prohibited items, waste/scrap, PLI-covered products, and items already benefiting from schemes like RoDTEP and RoSCTL are generally excluded — check the current positive list for your product
Why This Matters for Exporters
Indian exporters have historically borne a real cost disadvantage here: rupee export credit typically runs 8–12% depending on your bank and risk profile, against central bank rates of around 3% in several competing Asian manufacturing economies. That spread eats directly into export competitiveness, especially for MSMEs who don't have the balance sheet to absorb it. A 2.75% subvention doesn't erase that gap, but it meaningfully narrows it on working capital that every exporter needs regardless of margin.
How to Check Eligibility
Since this is a live, still-rolling-out scheme as of 2026, the most reliable path is to check the current positive list of eligible HSN lines and the application process directly on the DGFT portal, or ask your bank's trade finance desk whether they're currently processing claims under it — implementation details can still be evolving at the bank level even after a scheme is notified.
This article is for general information only. Interest subvention rates, caps and eligible tariff lines are set by government notification and can change — confirm current terms with DGFT or your export credit bank before relying on this for financial planning.
