The International Financial Services Centres Authority (IFSCA), through its circular dated March 19, 2026, operationalised support for alternative trade finance instruments under the Government of India’s Export Promotion Mission (EPM) – NIRYAT PROTSAHAN scheme, announced by DGFT. The scheme, introduced on a pilot basis, aims to enhance access to export finance for MSMEs engaged in international value chains by promoting export factoring arrangements. These arrangements may be with or without recourse and can be denominated in Indian Rupees or freely convertible foreign currencies, provided they are entered into with RBI or IFSCA-regulated entities. Eligible financial institutions, including IFSC Banking Units and finance companies undertaking factoring, are required to extend benefits such as interest subvention or equivalent cost support to MSME exporters. They must also comply with operational requirements, including reporting and claim submission. The circular has been issued under statutory powers to regulate financial services in IFSCs.
International Financial Services Centres Authority
Circular No. IFSCA-FCROITFS/3/2025-Banking | Date: March 19, 2026
To,
All IFSC Banking Units (IBUs);
Finance Company/ Units (FC/FUs) undertaking the activity of Factoring
Dear Madam/ Sir,
Support for Alternative Trade Instruments under Export Promotion Mission (EPM) — NIRYAT PROTSAHAN
The Government of India has, vide Trade Notice No. 25/2025-26 dated February 20, 2026, issued by the Directorate General of Foreign Trade (DGFT), announced the captioned Scheme on a pilot basis. The detailed policy framework and procedural and operational guidelines are enclosed.
2. The Scheme aims to improve access to export finance for Micro, Small, and Medium Enterprises (MSMEs) involved in international value chains by providing support for alternative trade finance instruments with focus on export factoring.
3. Export factoring arrangements, including both recourse and non-recourse factoring, and denominated in Indian Rupees or freely convertible foreign currencies, entered between eligible MSMEs (involved in international value chains) and Reserve Bank of India (RBI) or International Financial Services Centres Authority (IFSCA) regulated entities shall be supported.
4. In terms of the above, all IBUs and FC/FUs – undertaking activity of factoring (`hereinafter referred to as eligible financial institutions’) shall extend the benefits under the scheme, in the form of interest subvention or equivalent cost support on the export factoring interest cost element, to eligible MSME exporters, in accordance with the provisions of the Scheme, and subject to applicable directions/ circulars/ instructions issued by IFSCA.
5. Further, eligible financial institutions shall ensure compliance with all prescribed operational requirements, including submission of claims, reporting obligations, and timelines, as specified under the Scheme and as may be amended from time to time.
6. This circular is issued in exercise of powers conferred by Sections 12 and 13 of the International Financial Services Centres Authority Act, 2019, to develop and regulate the financial products, financial services and financial institutions in the International Financial Services Centres.
7. A copy of this circular is available on the IFSCA website at ifsca.gov.in
Yours faithfully,
Sd/-
(Supriyo Bhattacharjee)
Chief General Manager
Head – Department of Banking
supriyo.b0ifsca.gov in
