DGFT clarifies Interest Subvention Support scheme for export credit under Export Promotion Mission

The Directorate General of Foreign Trade (DGFT) has issued Trade Notice No. 33/2025-26 dated 20th March 2026 to refine and clarify the operational framework of the Interest Subvention Support mechanism for pre- and post-shipment export credit under the Export Promotion Mission (EPM) – Niryat Protsahan.

These amendments build upon earlier instructions contained in Trade Notice No. 20/2025-26 dated 2nd January 2026 and Trade Notice No. 22/2025-26 dated 16th January 2026, and are now an integral part of the Interest Subvention Support guidelines. They focus on:

  • Alignment with the Reserve Bank of India’s consolidated directions on export credit
  • Clear rules on eligibility, especially in relation to NPAs and tariff line changes
  • Mandatory use of a Unique Identification Number (UIN/UDIN)
  • Caps on annual interest subvention per IEC
  • Digitised claim filing by banks

Below is a structured, practitioner-focused explanation of these changes and their practical implications for assessee-exporters and lending institutions.

1. Linkage of eligibility with RBI’s consolidated directions

1.1 Export credit to follow RBI’s consolidated Directions on Credit Facilities

The revised Draft HBP Para X.1(b) expressly reiterates that:

  • Export credit must be sanctioned and operated strictly in terms of the Reserve Bank of India’s Consolidated Directions on Credit Facilities, as amended over time.
  • The interest subvention benefit is available only where the export credit conforms to the prevailing RBI directions, including aspects such as:
    • Tenure and permissible period of export credit
    • Structure and nature of the credit facility

Note: If a particular export credit facility does not fit within the framework or conditions set by the RBI’s consolidated directions, the corresponding interest subvention benefit under EPM will not apply.

2. Cut-off dates and applicability of interest subvention

2.1 Only credit disbursed on or after 2 January 2026 is eligible

DGFT has categorically laid down that:

  1. Export credit (pre-shipment and post-shipment) disbursed on or after 2 January 2026 alone will be eligible for Interest Subvention Support.
  2. Any export credit disbursed before 2nd January 2026 is automatically outside the scope of this scheme and will not receive subvention.

This timing condition is crucial for both banks and assessee-exporters when assessing the admissibility of claims.

2.2 Date from which subvention applies for eligible loans

For qualifying export credit sanctioned on or after 2nd January 2026:

  • Interest subvention will run from the actual date of loan disbursement, but only if:
    • The corresponding UIN/UDIN has been generated, and
    • The UIN/UDIN has been furnished to the bank on the date of disbursal itself.

If the loan is disbursed first and the UIN is applied for later, the scheme benefit will not be available at all for that disbursement.

3. Classification as NPA and effect on subvention

3.1 No interest subvention post NPA classification

Under the newly inserted Draft Appendix-A Para 3(f):

  • Once the export credit account is categorised as a Non-Performing Asset (NPA), interest subvention stops from that date onwards.
  • There is no subvention benefit for any interest accrued after the date of NPA classification.
  • Subvention, if any, remains restricted to the period during which the account was standard and compliant.

This rule underscores the importance of timely repayment and maintaining account health to continue enjoying EPM benefits.