The announcement of the EPM in this year’s budget on February 1 predates US president Donald Trump’s barrage of tariff announcements starting April 2 with India being his chosen target. From August 27, Indian exports to the US, which is its biggest market, will face 50% duties, unless there is a last-minute change of plan. The uncertainty around the rapidly changing global trade dynamics will have to be factored in, while finalising the design of the mission, the sources said.
The mission subsumes many of the functions that were being met through schemes that are either no longer operational or need changes. Announced in this financial year’s budget, it has an allocation of Rs 2,250 crore for this FY of which Rs 200 crore is for Market Access Initiative (MAI) and Rs 50 crore is for lab grown diamonds.
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The allocation for this year is lower as five months of the financial year has already passed and the schemes will take some more time to be operationalised so the current allocation may suffice.
“The mission has a sectoral approach and inter-departmental approach. It is anchored in the collaborative framework involving department of commerce (DoC), department of micro small and medium enterprises (MSMEs), ministry of finance and other ministries and other stakeholders,” a senior official said.
The other agencies that will be part of the EPM are Exim Bank, Export Credit Guarantee Corporation (ECGC), Credit Guarantee Fund for Micro and Small Enterprises, National Credit Guarantee Trustee Company, Export Promotion Councils, commodity boards, industry associations and state governments.
Two pillars of export support: Niryat Protsahan and Niryat Disha
The mission is proposed to be implemented through two schemes – Niryat Protsahan (Export Encouragement) and Niryat Disha (export Direction). Niryat Protsahan will provide trade finance support, focussing on export credit, export factoring, export credit insurance, requirements of collateral for finance and other financing mechanisms to bridge liquidity gaps faced by Indian exporters. The overall allocation for this component is expected to be Rs 10,000 crore. The main elements under the Niryat Protsahan scheme, being considered by the government, include interest equalisation support worth over Rs 5,000 crore. For credit support, six schemes are under consideration.
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Niryat Disha part of the scheme will sub-schemes that will drive the targeted support for export quality compliance, overseas market development, branding, export warehousing and logistics, and capacity building to integrate more Indian enterprises into the global value chain. Overall allocation for Niryat Disha is Rs 14,500 crore, sources said. Export quality compliance will have about Rs 4,000 crore, and overseas market development over Rs 4,000 crore.