India plans credit guarantees for small firms, exporters hit by US tariffs, sources say

 India is planning to provide credit guarantees for loans overdue up to 90 days to small businesses and exporters, amid higher tariffs imposed by the U.S., according to government sources .

The federal finance ministry has proposed to provide 10%-15% credit guarantees to banks for advancing loans to stressed small businesses, with turnover up to 5 billion rupees, that fall under the Reserve Bank of India’s (RBI) so-called special mention accounts (SMA), the sources said.

The scheme is designed for firms that are stressed due to external factors “beyond their control”, and the eligibility criteria are being firmed up, according to the sources.

The criteria will cover small exporters who are currently facing uncertainties due to higher tariffs imposed by the U.S., a key market for Indian exports, the second source said.
The Indian government is preparing a scheme to provide term loans for small exporters that would be backed by a government guarantee of a maximum 70%-75%, the second source said. The scheme was announced by India’s finance minister in the budget for fiscal 2026.