IFSCA Launches a Scheme Titled Support for Alternative Trade Instruments under Export Promotion Mission

Circular no. e. F.No. IFSCA-FCR0ITFS/3/2025-Banking; Dated: 19.03.2026

The International Financial Services Centres Authority (IFSCA) has launched a scheme titled “Support for Alternative Trade Instruments under Export Promotion Mission (EPM) – NIRYAT PROTSAHAN”.

The scheme is designed to enhance access to export finance for Micro, Small and Medium Enterprises (MSMEs) engaged in international value chains, with a specific focus on alternative trade finance instruments such as export factoring.

1. Objective of the Scheme

The scheme aims to:

• Improve availability of export finance for MSMEs
• Support participation of MSMEs in global value chains
• Promote the use of alternative trade finance mechanisms
• Reduce financing costs and improve liquidity for exporters

2. Coverage of Export Factoring Arrangements

The scheme provides support for export factoring arrangements, including:

• Recourse factoring, and
• Non-recourse factoring

These arrangements may be denominated in:

• Indian Rupees (INR), or
• Freely convertible foreign currencies

The arrangements must be entered into between:

• Eligible MSMEs involved in international value chains, and
• Entities regulated by:

1. 1. Reserve Bank of India (RBI), or
   2. IFSCA

3. Role of IFSC-Based Financial Entities

All International Banking Units (IBUs) and Finance Companies/Finance Units (FC/FUs) undertaking factoring activities are required to:

• Extend benefits under the scheme to eligible MSME exporters
• Provide such benefits in the form of:

1. 1. Interest subvention, or
   2. Equivalent cost support on the interest component of export factoring

4. Nature of Financial Support

The scheme specifically targets the interest cost element of export factoring, thereby:

• Lowering the effective cost of financing
• Improving cash flow for MSME exporters
• Encouraging adoption of factoring as a financing tool

5. Objective of the Initiative

The initiative seeks to:

• Strengthen export financing ecosystem in IFSC
• Promote innovative trade finance solutions
• Enhance competitiveness of MSME exporters
• Facilitate integration of Indian businesses with global markets

Overall, the scheme supports MSMEs by providing cost-effective financing alternatives, thereby boosting export growth and participation in international trade.

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