The Directorate General of Foreign Trade (DGFT) launched a significant intervention on 20th February 2026 through Trade Notice No. 25/2025-26. This initiative, Support for Alternative Trade Instruments under the Export Promotion Mission (EPM) – NIRYAT PROTSAHAN, strengthens access to export finance for MSMEs. It specifically targets businesses involved in international value chains by providing structured support for alternative trade finance mechanisms.
Launching NIRYAT PROTSAHAN for MSMEs
The DGFT implements this support mechanism with immediate effect to enhance the competitiveness of small businesses. This mission supplements traditional bank-based export credit by focusing on export factoring. Furthermore, the government operationalises this intervention on a pilot basis to gather feedback and refine the process through data-driven insights. Annexure-I of the notice contains the detailed policy framework while Annexure-III outlines the governance structure.
Understanding Export Factoring Support Mechanisms
Eligible MSMEs receive interest subvention on export factoring interest costs for both domestic and international transactions. The government supports recourse and non-recourse factoring arrangements denominated in Indian Rupees or freely convertible foreign currencies. These arrangements must involve entities regulated by the Reserve Bank of India (RBI) or the International Financial Services Centre Authority (IFSCA). Consequently, MSMEs manage their liquidity effectively while handling international receivables through regulated factors.
Eligibility for Alternative Trade Instruments
All MSMEs must possess a valid and active Importer-Exporter Code (IEC) to qualify for this provision. Additionally, firms require a valid MSME Udyam Registration Number at the time of application. The intervention applies only to exports listed under the notified positive list of 4,139 tariff lines at the HS six-digit level. Therefore, exporters must verify their products against Annexure-V of the Trade Notice before initiating a subvention claim.
Claiming Export Factoring Support Interest Subvention
The initiative provides an interest subvention rate of 2.75% to ease the financial burden on small exporters. The subvention amount is capped at ₹50 lakh per MSME within a single financial year. Additionally, the authorities disburse the subvention directly to the bank account linked with the exporter’s IEC. This support effectively reduces the overall cost of borrowing for micro, small, and medium enterprises engaged in international trade.
Navigating the Online Application Process
Applicants submit an online declaration of intent through the DGFT portal before availing any factoring facility. The designated portal then generates a Unique Identification Number (UIN) specific to the chosen factor and the exporter. MSMEs approach their selected factoring agency with this UIN to begin the transaction process. Moreover, exporters ensure they utilise the subvention strictly for eligible tariff lines to avoid potential recovery actions or penalties.
Optimising Liquidity through ENCASH
The 360tf EnCash (Export Now Cash Now) solution serves as a vital bridge for MSMEs seeking to leverage this new DGFT support. This digital ecosystem allows buyers to benefit from extended credit periods while exporters receive immediate funds upon invoice acceptance. By connecting businesses with 115+ onboarded banks and FI’s, 360tf enables exporters to sell receivables and unlock instant working capital without adding debt. This ensures faster liquidity, improved cash flow, and seamless execution aligned with modern open-account trade. Consequently, MSMEs gain direct access to the RBI and IFSCA-regulated factors required for the 2.75% interest subvention while maintaining robust global operations.
