DGFT Launches Support for Alternative Trade Instruments under Export Promotion Mission (EPM) – NIRYAT PROTSAHAN
The Directorate General of Foreign Trade (DGFT) has introduced a new intervention under the Export Promotion Mission (EPM) – NIRYAT PROTSAHAN to strengthen access to export finance for MSMEs engaged in international value chains. The initiative, titled “Support for Alternative Trade Instruments,” is implemented prospectively with immediate effect. It aims to supplement traditional bank-based export credit by supporting structured alternative trade finance mechanisms, with an initial focus on export factoring.
(See Annexures I–IV for the detailed Policy Framework, Operational Guidelines, Governance Structure, and Procedure for Availing Support.)
Objective of the Intervention
The new framework is designed to improve liquidity access for MSMEs that face constraints in securing conventional export credit. By enabling structured trade finance support, the initiative seeks to:
- Strengthen export competitiveness
- Improve working capital cycles
- Reduce dependency on traditional credit channels
- Enhance integration of MSMEs in global supply chains
This intervention aligns with the broader objectives of the Foreign Trade Policy (FTP) 2023.
Focus on Export Factoring
What Is Covered?
The scheme supports export factoring arrangements, including:
- Recourse and non-recourse factoring
- Transactions denominated in Indian Rupees
- Transactions denominated in freely convertible foreign currencies
Eligible arrangements must be entered into between MSMEs (engaged in international value chains) and entities regulated by:
This structured approach provides institutional backing to alternative trade finance instruments while maintaining regulatory oversight.
Pilot-Based Operationalisation
The intervention will initially be operationalised on a pilot basis. The purpose of the pilot phase includes:
- Institutional learning
- Stakeholder feedback
- Data-driven refinements
- Policy optimisation
Detailed guidance on eligibility, governance structure, and procedural steps is provided in Annexures I to IV of the Trade Notice.
Stakeholder Consultation Under FTP 2023
In accordance with Paragraph 1.07A of the Foreign Trade Policy (FTP) 2023, stakeholders are invited to submit comments and suggestions within 30 days from the issuance of the Trade Notice. This consultative approach ensures that the framework evolves in line with exporter requirements and ground realities.
Note: This initiative marks a strategic shift toward diversified export finance mechanisms. MSMEs involved in international value chains should evaluate export factoring structures in consultation with regulated financial entities to assess suitability and compliance alignment.
Conclusion
The Support for Alternative Trade Instruments under EPM – NIRYAT PROTSAHAN represents a significant step in strengthening India’s export finance ecosystem. By institutionalising export factoring support and placing it under a regulated framework, DGFT aims to enhance liquidity access, reduce financial bottlenecks, and improve global competitiveness for MSMEs.
The detailed Trade Notice and Annexures follow the link below:
https://prefaceventure.com/wp-content/uploads/2022/10/Trade-Notice-Alternative-Trade-Niryat-Protsahan.pdf