NIRYAT PROTSAHAN: how to actually claim the 2.75 percent interest subvention

The Interest Equalisation Scheme was renamed NIRYAT PROTSAHAN in the FY 2024-25 Foreign Trade Policy update. The MSME exporter subvention rate was held at 2.0 percent, and for identified product groups (350 ITC HS tariff lines) the rate is 2.75 percent. The window has been extended through March 2026, with Rs 2,500 crore outlay.

Most exporters we speak to either do not know they qualify, or assume their bank applies it automatically. The first assumption is wrong. The second is more often wrong than right.

Eligibility, in operational terms

You qualify if all of the following are true:

• You are a registered MSME with valid Udyam registration, or your export product falls in the 350 identified ITC HS lines.
• You hold a valid Importer-Exporter Code (IEC).
• You are availing pre-shipment credit (packing credit) or post-shipment credit in Indian rupees from a participating AD bank.
• Your credit is for export-purpose financing, not general working capital.

If you finance your exports in USD or any other foreign currency, NIRYAT PROTSAHAN does not apply.

Two routes, very different friction

Route A: Your bank applies it for you. Some banks (HDFC, Axis, ICICI for medium and large MSMEs) compute and pass through the subvention automatically each month against your loan account. You see a credit line entry. You file nothing.

Route B: You apply through your bank. Most public sector banks and many smaller private banks require the MSME to submit a half-yearly claim form (revised PROT-1 format, available on the IBA portal) with shipping bill numbers, sanctioned credit, and disbursed amounts. The bank validates and forwards to RBI. RBI credits the bank's account, which then credits yours.

The difference between Route A and Route B is administrative ease, not eligibility. If you are on Route B and you stop filing PROT-1 for two consecutive half-years, your subvention is forfeit for that period.

What to ask your bank, this week

Three questions, in this order:

• "Are you a participating AD bank under the NIRYAT PROTSAHAN scheme?" (Answer should be yes for any major bank.)
• "Are you applying the 2.0 percent / 2.75 percent subvention on my packing credit and post-shipment credit accounts?" (If the answer is "you need to file PROT-1", confirm the filing cadence and your last submission date.)
• "Can you share the last two beneficiary statements you submitted to RBI for my account?" (This is the audit trail. If your bank cannot produce these, you have not been claimed.)

The numbers, for a Rs 25 crore exporter

Assume Rs 12 crore in pre-shipment credit at 7 percent for an average 90-day tenor. The annual interest you pay is approximately Rs 84 lakh. A 2.0 percent subvention is Rs 24 lakh. A 2.75 percent subvention is Rs 33 lakh.

That is recovered straight to your P&L. It does not require shipping bill amendment. It does not require ICEGATE coordination. It is entirely a banking process. And the median MSME we surveyed has been leaving it unclaimed for an average of 14 months.