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Credit guarantee scheme to help maintain cash flow and financial stability for pharma exporters: Experts
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Shardul Nautiyal, Mumbai
November 28 , 2025
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The Credit Guarantee Scheme for Exporters (CGSE), announced by the central government recently, is poised to help maintain cash flows and offer greater financial stability for pharma exporters. This scheme also represents a significant opportunity for pharma exporters and MSMEs to expand their global footprint, according to industry experts.
This also comes as a welcome change as market observers pinpoint that fluctuations in global currency markets have been impacting the financial stability of exporters. The ongoing economic pressures worldwide have also increased the difficulties in maintaining consistent cash flow, further straining the ability of exporters to adhere to the payment deadlines.
The Government of India recently approved the CGSE, a landmark initiative designed to strengthen India’s export ecosystem. The scheme provides 100% credit guarantee coverage through the National Credit Guarantee Trustee Company Limited (NCGTC) to Member Lending Institutions (MLIs), enabling them to extend additional credit facilities of up to Rs. 20,000 crores to eligible exporters, including MSMEs.
This scheme is expected to significantly boost liquidity, empower exporters, and enhance India’s global trade competitiveness.
“Given the pharma export sector’s significant contribution to foreign exchange reserves, such kind of schemes will offer a more required relief and flexible approach necessary to ensure the continued viability and competitiveness of Indian exporters,” according to an industry representative.
It will provide guarantee coverage for credit assistance to eligible exporters and MSME exporters, thereby facilitating easier access to working capital and strengthening India’s export base.
Eligibility criteria for direct exporters under MSME is at least 5% of turnover through exports. For non-MSME units, it is at least 20% of turnover through exports.
Eligibility criteria for indirect exporters include MSME units supplying at least 30% of their total turnover to eligible direct exporters with additional conditions like criteria may be satisfied with respect to either FY24 or FY25. MSMEs must have a valid Udyam Registration Number. Borrowers must have active working capital limits with MLIs at the time of sanction/disbursement Accounts must be in Standard category (excluding SMA-2), not exceeding 60 days overdue as of September 30, 2025, and not classified as NPA.
Quantum of support for direct exporters is up to 20% of sanctioned export working capital limits (fund & non-fund based). Quantum of support for indirect exporters is up to 20% of sanctioned domestic working capital limits (fund & non-fund based) and maximum loan amount of Rs. 50 crore per borrower (rupee currency only).
For indirect exporters, lenders must first utilize available balances in existing fund-based working capital accounts before extending credit under the scheme.
Key features of the Scheme include No Processing Fee: Zero charges for sanction of facility, Guarantee Cover of upto 100% by NCGTC, Loan Tenor of 4 years fixed, including 1-year moratorium; repayable in equal monthly instalments thereafter, Interest Rate of 1% below existing working capital facility rate, capped at 10% p.a. (Banks/FIs) and 14% p.a. (NBFCs), subject to RBI guidelines. Scheme duration is available until guarantees for loans amounting to Rs. 20,000 crore are issued or March 31, 2026, whichever is earlier.
NCGTC has requested Member Lending Institutions (Banks/NBFCs) to onboard for the scheme. Exporters are encouraged to check with their lending banks to avail coverage under CGSE.
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