DGFT widens interest subvention support for MSE iron & steel exporters under Chapter 72
The Directorate General of Foreign Trade (DGFT) has significantly expanded the coverage of the Interest Subvention Support for Pre- and Post-Shipment Export Credit under the Export Promotion Mission (EPM) for the iron and steel sector.
Through Trade Notice No. 01/2026-27 dated 20 April 2026, DGFT has added 167 tariff lines under Chapter 72 (iron and steel and related products) to the existing list of products that qualify for interest subvention. This benefit, however, is strictly confined to Micro and Small Enterprises (MSEs). Medium Enterprises are expressly denied this benefit for the newly notified tariff lines.
The Trade Notice also clarifies that this extension is only prospective. Interest subvention will be available only for eligible export credit disbursed on or after 20 April 2026, the date of issuance of the Trade Notice. All other conditions, procedures and operational guidelines laid down in earlier Trade Notices under the EPM continue to apply without any modification.
Background: Interest Subvention Support under Export Promotion Mission
The Government of India, under the Export Promotion Mission (EPM), provides interest subvention support to ease the cost of export credit and enhance the competitiveness of Indian exporters in global markets. The scheme covers both:
- Pre-shipment export credit, and
- Post-shipment export credit
The framework and detailed operational guidelines for this interest subvention support were initially prescribed through:
- Trade Notice No. 20/2025-26 dated 02.01.2026
- Trade Notice No. 22/2025-26 dated 16.01.2026
- Trade Notice No. 33/2025-26 dated 20.03.2026
These Trade Notices set out:
- Eligible sectors and tariff lines
- Nature and scope of export credit covered
- Quantum and modality of interest subvention
- Documentation and procedural requirements
The current Trade Notice No. 01/2026-27 builds upon this framework by inserting a new Annexure-IIA to Annexure-II of Trade Notice No. 20/2025-26, specifically catering to MSE exporters dealing in Chapter 72 goods.
Key change: New Annexure-IIA for Chapter 72 tariff lines
Insertion of Annexure-IIA
The Trade Notice introduces a new Annexure-IIA, which is added to Annexure-II of Trade Notice No. 20/2025-26. This new annexure:
- Lists 167 additional HS six-digit tariff lines under Chapter 72 (iron and steel and related products)
- Categorically earmarks these tariff lines as eligible only for Micro and Small Enterprises (MSEs)
- Explicitly excludes Medium Enterprises from claiming interest subvention in respect of export credit for these specific tariff lines
Important: The HS codes, descriptions and coverage of the 167 tariff lines under Annexure-IIA are part of the Trade Notice itself and must be carefully cross-checked by exporters and bankers to determine eligibility.
Exclusive eligibility for MSEs
DGFT has drawn a clear line between enterprise categories for these new tariff lines:
- Only MSEs are permitted to receive interest subvention support in respect of exports covered under Annexure-IIA.
- Medium Enterprises are not eligible for interest subvention on export credit pertaining to these 167 tariff lines.
This distinction is not a general disqualification of Medium Enterprises from the EPM scheme, but only for the additional tariff lines notified in Annexure-IIA. Medium Enterprises may still remain eligible for other products or tariff lines covered under the earlier annexures, to the extent allowed by those Trade Notices.
Prospective operation of eligibility
DGFT has reaffirmed the principle of non-retrospective application by explicitly stating that:
- The eligibility of tariff lines under Annexure-IIA is prospective
- Only export credit disbursed on or after 20 April 2026 (the date of Trade Notice No. 01/2026-27) will qualify for interest subvention under Annexure-IIA
- Any export credit disbursed before this date, even if relating to the same goods, will not be covered under the expanded interest subvention support
Exporters and lending institutions must therefore closely track the disbursement date of export credit, not merely the date of export order or shipment, while assessing eligibility under the new Annexure-IIA.