The Union Budget 2025 has introduced several initiatives aimed at bolstering the global presence of Micro, Small, and Medium Enterprises (MSMEs) through enhanced export promotion schemes. These measures are designed to provide financial support, reduce operational challenges, and mitigate risks associated with international trade.

Key Export Promotion Schemes Announced in Union Budget 2025

A. Merchandise Exports from India Scheme (MEIS) Enhancement

Objective: To incentivize MSMEs to increase exports by providing duty credit scrips.
Budget Allocation: An additional ₹5,000 crore has been allocated to enhance the MEIS, allowing MSMEs to offset various duties and taxes, thereby reducing the cost of exporting.
Impact: Increased competitiveness of MSME products in international markets due to reduced export costs.

B. Export Credit Guarantee Corporation (ECGC) Support

Objective: To provide credit risk insurance to MSMEs, safeguarding them against potential payment defaults by international buyers.
Budget Allocation: ₹3,000 crore has been earmarked to strengthen ECGC, enabling it to underwrite more significant export credit insurance covers.
Impact: Enhanced confidence among MSMEs to explore new markets, knowing that potential payment risks are mitigated.

C. Small Industries Development Bank of India (SIDBI) Initiatives

Objective: To offer financial assistance and advisory services to MSMEs aiming to expand their export operations.
Budget Allocation: ₹2,500 crore has been allocated to SIDBI to provide concessional loans and capacity-building programs for MSMEs.
Impact: Improved access to finance and knowledge, empowering MSMEs to compete globally.

Financial Analysis Perspective: How We Can Add Value

As a finance professional, we can play a pivotal role in guiding MSMEs to effectively leverage these schemes:

A. Strategic Financial Planning

Role: Assist MSMEs in integrating export incentives into their financial models to optimize profitability.
Key Focus:

• Developing budgets that account for duty credits from MEIS.
• Projecting cash flows considering reduced export costs.

B. Risk Management Advisory

Role: Advise MSMEs on utilizing ECGC services to protect against international payment defaults.
Key Focus:

• Evaluating the cost-benefit of export credit insurance.
• Implementing strategies to mitigate foreign exchange risks.

C. Accessing Financial Resources

Role: Guide MSMEs in securing funds through SIDBI’s concessional loan programs.
Key Focus:

• Preparing robust loan proposals.
• Ensuring compliance with eligibility criteria.

D. Compliance and Regulatory Guidance

Role: Ensure MSMEs adhere to export regulations and effectively utilize available incentives.
Key Focus:

• Navigating the application processes for MEIS and ECGC.
• Maintaining compliance with international trade laws.

Conclusion

The Union Budget 2025 presents substantial opportunities for MSMEs to expand their global reach through enhanced export promotion schemes. By providing strategic financial guidance, you can empower MSMEs to capitalize on these initiatives, fostering sustainable growth and competitiveness in the international arena.