Government Lowers Export Factoring Costs: What Trade Notice 25/2025-26 Means for MSME Exporters
Government Lowers Export Factoring Costs: What Trade Notice 25/2025-26 Means for MSME Exporters India’s export ecosystem is entering a structurally stronger phase. With targeted policy support, expanding digital trade infrastructure, and the growing role of regulated platforms, MSME exporters today have more efficient avenues to unlock working capital. The latest Trade Notice No. 25/2025-26 marks a meaningful step in this direction. By enabling interest subvention on export factoring, the policy reduces financing costs for exporters while encouraging wider adoption of receivables-based funding. For MSMEs operating in competitive global markets, this shift is not merely incremental. It represents a transition from collateral-heavy export finance toward cash-flow-driven, technology-enabled liquidity provider solution in form of export factoring. The Traditional Export Finance Model: Structural Frictions Historically, export finance in India relied heavily on: Packing ...