Lower compliance barriers may make the first shipment easier. The harder test is whether finance, certification, logistics and market access can help small firms become regular exporters.
Lower compliance barriers may make the first shipment easier. The harder test is whether finance, certification, logistics and market access can help small firms become regular exporters.
Delhi: India’s export policy is entering a fresh phase. The policy challenge is no longer simply to make exports more competitive for firms that are already integrated into global markets, but also to expand the number of firms that are able to enter and participate in those markets. This distinction is particularly important for Micro, Small and Medium Enterprises (MSMEs). MSME-related products accounted for 48.55% of India’s merchandise exports in 2024–25, according to government data. Yet participation in global trade is not evenly distributed across the MSME sector. The costs of finance, certification, logistics, market discovery and regulatory compliance can be particularly daunting for firms that have never exported before.
Recent policy measures suggest that the government is increasingly recognising these barriers. On September 15, 2026, the Directorate General of Foreign Trade (DGFT) amended the Foreign Trade Policy, 2023 to exempt export consignments with a Free on Board (FOB) value of up to ₹3 lakh from the requirement of a Registration-cum-Membership Certificate (RCMC), wherever such a certificate would otherwise have been required. The measure is intended to facilitate small-value exports through postal, courier and other emerging channels while reducing the initial compliance burden for small and first-time exporters. This is an important change because it lowers the cost of trying. Government data for the five-year period from 2021–22 to 2025–26 show that consignments worth up to US$3,000 accounted for 43% of shipping bills but only 0.86% of India’s total merchandise export value, indicating the large number of relatively small transactions involved in cross-border trade. However, the more important question is whether India’s emerging export-support architecture can help small firms continue exporting beyond their first consignment. Lowering the barrier to entry is one step; enabling firms to secure finance, meet international standards, find buyers, manage logistics and navigate regulatory requirements is what could determine whether a first shipment becomes a sustained export business.
Finance Remains a Critical Constraint
Exporting often requires working capital before any revenue is generated. A small producer may need to purchase inputs, build inventory, package goods, arrange transportation and then wait for payment from an overseas customer. For a firm with a limited credit history or inadequate collateral, financing an export order can therefore be a significant challenge. This is a key focus of the Export Promotion Mission (EPM), approved with an outlay of ₹25,060 crore for the period 2025–26 to 2030–31. The Mission has two components: NIRYAT PROTSAHAN, which focuses on trade finance, and NIRYAT DISHA, which addresses non-financial aspects of the export ecosystem.
NIRYAT PROTSAHAN includes measures such as interest subvention, export factoring, collateral guarantees, credit support for e-commerce exporters and assistance for export diversification. In addition, the government has approved a Credit Guarantee Scheme for Exporters under which the National Credit Guarantee Trustee Company Limited provides 100% guarantee coverage to member lending institutions for additional collateral-free credit facilities aggregating up to ₹20,000 crore for eligible exporters, including MSMEs. The policy thrust is therefore clear: access to finance is increasingly being treated as an export-enabling constraint rather than simply a conventional MSME credit issue.
The challenge, however, lies in implementation. In February 2026, the Ministry of Commerce and Industry stated that interest-subvention and collateral-support measures under NIRYAT PROTSAHAN had been operationalised for MSMEs, while other interventions were being rolled out in phases. For a genuinely small or first-time exporter, the success of these initiatives will ultimately depend on whether they translate into accessible, timely and affordable credit rather than simply adding more schemes to the policy menu on paper.
Meeting International Standards Is Another Barrier
A product that sells well in the domestic market is not necessarily ready for international markets. Exporters are often required to comply with product-specific standards relating to quality, safety, packaging, labelling, testing and traceability. For a small firm, the cost of obtaining certifications, conducting laboratory tests and modifying products to meet the requirements of different markets can be considerable. This is particularly challenging for first-time exporters, who may have limited knowledge of the regulatory requirements in the countries they seek to enter. A company may have a commercially viable product but still be unable to export because it lacks the required certification or cannot afford the associated testing and compliance costs. The Export Promotion Mission recognises this challenge through NIRYAT DISHA, which focuses, among other areas, on export quality and technical compliance. The initiative provides targeted assistance to sectors facing high compliance costs arising from Sanitary and Phytosanitary (SPS) measures, Technical Barriers to Trade (TBT) and other non-tariff measures, including support for testing, certification and audits.
Such support is crucial because price incentives alone cannot form the entire basis of export competitiveness. Even where transaction costs are lower or export incentives are available, an MSME may not be able to secure a sustainable export order if it cannot meet the standards of its target market. The larger challenge is making these compliance mechanisms accessible to the smallest firms. An established exporter with dedicated compliance teams and relationships with testing agencies may regard meeting international standards as a routine part of doing business. For a micro enterprise attempting its first export, the same process can represent a significant fixed cost and an unfamiliar administrative burden. The new export-support architecture will therefore be effective only if certification support is not merely available, but also accessible in practice. A first-time exporter must be able to identify the relevant standards, access testing and certification facilities and fulfil the necessary requirements without undue cost or delay.
Finance and Certification Are Only Part of the Problem
For many MSMEs, exporting is not constrained by one barrier alone. A small firm may have a competitive product but lack information about overseas demand. It may find a buyer but struggle with shipping costs. It may obtain finance but face difficulties complying with technical standards or navigating documentation. Logistics can be particularly significant for small-value exporters because transportation, warehousing and documentation costs form a larger share of the value of smaller consignments. Firms also need reliable information on overseas buyers, distribution channels, customs requirements and market-specific regulations before an export opportunity becomes commercially viable. This is why an integrated export-support framework matters. Addressing finance without addressing compliance, or reducing documentation without improving market access, may help at one stage of the export process while leaving another bottleneck intact. The Export Promotion Mission’s broader approach — combining financial support with interventions relating to certification, logistics and market access — therefore reflects an important shift. The policy question is now whether this integrated architecture can function as such in practice, particularly for firms that do not already possess export experience or specialised staff.
From First Shipment to Regular Exports
India’s emerging export-support architecture represents a shift from focusing solely on export incentives towards addressing some of the practical barriers that prevent smaller firms from entering global markets. The ₹3 lakh RCMC exemption lowers an entry barrier, while the Export Promotion Mission addresses constraints relating to finance, certification, logistics and market access. But the success of this approach will ultimately depend on whether these measures reach firms that are not already equipped to export. For a first-time MSME, the challenge is rarely limited to a single constraint. It may need affordable working capital, international certification, reliable logistics, information about overseas markets and assistance in navigating documentation — all at the same time. The distinction between entering an export market and remaining in it is important. A simplified procedure may make one shipment possible, but becoming a regular exporter requires repeat customers, predictable financing, efficient logistics and the ability to meet market-specific standards consistently. That suggests that the real measure of India’s new export push should not only be growth in aggregate export value. It should also be whether more domestic MSMEs are able to make their first international sale, enter new markets and, most importantly, continue exporting after that first shipment. India’s policy challenge is no longer simply to make exporting easier. It is to make becoming an exporter — and remaining one — possible for a much broader base of its MSMEs.
