Driving Export Growth through Policy Reforms
The Union Budget 2025 presents a strategic vision for boosting exports, with a particular emphasis on MSMEs, infrastructure, digital trade facilitation, and sector-specific incentives. Recognizing that MSMEs contribute 45% of total exports, the government has introduced measures to ease credit access, streamline trade documentation, and enhance sectoral competitiveness. Below are the key highlights from the latest budget that will impact Indian exporters:
Key Highlights
- Strengthening MSME Exports
- Investment and turnover limits for MSME classification have been enhanced to 2.5x and 2x, respectively.
- Well-performing exporter MSMEs will have access to term loans up to ₹20 crore to boost their business expansion.
- Sector-Specific Export Incentives
- Footwear & Leather Sectors: Expansion of the Focus Product Scheme to facilitate exports worth ₹1.1 lakh crore.
- Handicrafts Sector: The export period is extended from 6 months to 1 year, with an additional 3-month extension if required. Also, 9 new items are added to the duty-free input list.
- Crust Leather: 20% export duty exemption to support small-scale tanners and exporters.
- Export Promotion & Ease of Doing Business
- Establishment of an Export Promotion Mission, jointly led by the Ministries of Commerce, MSME, and Finance, focusing on:
- Easy access to export credit
- Cross-border factoring support
- Addressing non-tariff barriers in overseas markets
- Launch of ‘BharatTradeNet’ (BTN), a unified digital platform for trade documentation and financing solutions.
- Development of a national framework to encourage Global Capability Centres (GCCs) in Tier-2 cities to boost trade infrastructure.
- Establishment of an Export Promotion Mission, jointly led by the Ministries of Commerce, MSME, and Finance, focusing on:
- Infrastructure & Logistics Support
- Enhancing air cargo infrastructure and warehousing to support the export of high-value perishable horticulture produce.
- Regulatory & Taxation Reforms
- Introduction of a voluntary declaration system allowing importers/exporters to declare material facts and pay duties with interest but without penalty.
- Amendment in Schedule III (w.e.f. 01.07.2017): Goods warehoused in Special Economic Zones (SEZs) or Free Trade Warehousing Zones (FTWZs), when supplied before clearance for exports or to the Domestic Tariff Area (DTA), will be treated neither as supply of goods nor as supply of services.
- Removal of IGCR condition for customs duty exemption on import of seeds for rough lab-grown diamond manufacturing.