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Govt to ease credit access, review quality controls after PM Modi's meeting with exporters - BusinessToday

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  Published in Business and Finance on Monday, November 10th 2025 at 1:15 GMT by Business Today
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Government Announces Measures to Ease Credit Access and Strengthen Quality Controls for Exporters After PM Modi’s Meeting

The Government of India has announced a comprehensive set of measures aimed at improving the credit landscape for exporters and at tightening quality‑control mechanisms across export markets. The reforms were unveiled following a high‑profile meeting of Prime Minister Narendra Modi with a broad spectrum of export‑related stakeholders, including the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce & Industry (FICCI), and the Export Promotion Council of India (EPCI). The announcement reflects the government’s continued commitment to sustaining the momentum of India’s export growth while ensuring that exporters meet international quality and compliance standards.

1. Easing Credit Access for Exporters

1.1. Relaxation of Collateral Requirements

One of the most significant outcomes of the meeting is the decision to relax collateral requirements for export credit. Banks will be allowed to consider alternative forms of security, such as bank guarantees, letters of credit, and export‑linked assets, thereby reducing the upfront burden on exporters. This move is expected to facilitate quicker disbursement of funds, especially for small and medium‑sized enterprises (SMEs) that traditionally face higher collateral barriers.

1.2. Interest‑Rate Adjustments and Extended Tenure

The government will introduce a preferential interest‑rate regime for export financing. The rates for export‑linked loans and credit facilities are slated to be reduced by up to 1.5 % p.a. from the benchmark repo rate. In addition, the tenure for export‑related credit will be extended by two years, providing exporters with a longer repayment horizon to manage cash‑flow cycles, particularly in the volatile global trade environment.

1.3. Expansion of Export Credit Guarantee Corporation (ECGC) Coverage

The Export Credit Guarantee Corporation (ECGC) will broaden its coverage to include a wider array of export sectors, such as electronics, pharmaceuticals, and agro‑chemicals. The new policy will also introduce a streamlined, online claim‑processing system that promises settlement within 30 days. For further details, the official policy brief can be accessed here: https://www.ecgc.in/about-ecgc

1.4. Dedicated Export Credit Fund

A dedicated Export Credit Fund will be launched, managed by the Export Development Group (EDG), to mobilise private‑sector investments in export credit. The fund will target a capital base of ₹50 billion over five years, providing additional liquidity for exporters requiring larger capital outlays for high‑value contracts.

2. Strengthening Quality Controls

2.1. Comprehensive Review of Quality‑Control Framework

Recognising the increasing scrutiny from foreign partners, the government will initiate a comprehensive review of the existing quality‑control framework for exporters. The review will focus on ensuring compliance with ISO 9001, IATF 16949, and other sector‑specific quality standards. The Ministry of Commerce has set up a task force headed by the Indian Export Inspection Board (IEIB) to map out gaps and recommend corrective measures.

2.2. Simplification of Certification Processes

Exporters will benefit from a new “one‑stop shop” certification portal, designed to streamline the acquisition of required quality certificates. The portal will integrate with existing certification bodies such as the Bureau of Indian Standards (BIS) and the International Organization for Standardization (ISO). Exporters can now apply, track, and receive certifications online, reducing the administrative burden. The portal’s launch date is expected in Q1 2026. More information is available at https://www.exportcert.in

2.3. Incentives for Quality‑Assurance Investment

To encourage exporters to invest in quality‑assurance infrastructure, the government will offer a 20 % tax credit on expenditure for setting up quality‑control laboratories and hiring certified auditors. This incentive will be valid for a period of five years from the policy’s implementation date.

2.4. Enhanced Auditing and Penalty Mechanisms

The government will introduce a robust auditing mechanism, whereby exporters will undergo annual audits by an independent panel. In case of non‑compliance, exporters will face penalties ranging from 5 % to 15 % of the contract value, depending on the severity of the breach. The revised penalties are designed to deter non‑compliance and maintain India’s reputation for high‑quality exports.

3. Stakeholder Feedback and Future Outlook

During the meeting, several exporters highlighted the importance of timely and transparent access to credit. “The current credit conditions have been a major bottleneck for our expansion plans,” said Rajesh Patel, CEO of a textile exporter. “The relaxation of collateral requirements and lower interest rates will enable us to pursue larger contracts with overseas buyers.”

A senior official from the Ministry of Commerce remarked, “We are committed to creating an environment where exporters can thrive without compromising on quality. The new policies reflect a balanced approach that safeguards both the exporters’ financial health and global market standards.”

Industry bodies echoed these sentiments, underscoring that the reforms will not only improve competitiveness but also bolster India’s standing as a reliable supplier in international trade. CII President Aruna Gupta noted, “With streamlined credit facilities and stringent yet fair quality controls, Indian exporters are poised to capture a larger share of the global market.”

4. Implementation Timeline

• March 2025 – Release of detailed guidelines for the new credit regime.
• April 2025 – Launch of the online export credit application portal.
• May 2025 – Initiation of the quality‑control framework review.
• July 2025 – First round of audits under the new system.
• January 2026 – Full operationalization of the Export Credit Fund.

5. Conclusion

The government’s recent policy measures represent a significant step toward creating a conducive environment for exporters. By easing credit access, reducing collateral demands, and tightening quality controls, India is set to strengthen its export infrastructure and reinforce its reputation for high‑quality goods. Exporters are encouraged to familiarize themselves with the new regulations and leverage the available incentives to drive growth and innovation in the coming years.