Funding Options for Exporters

Exporters in India have access to various funding options to support their international trade activities. These funding options are designed to help exporters manage working capital, finance production, and navigate the complexities of international trade. Here are some common funding options for exporters in India:


  1. Export Credit:

    • Export credit refers to loans or lines of credit provided by financial institutions to exporters. These funds can be used to finance the production of goods, cover pre-shipment expenses, and bridge the gap between production and payment from overseas buyers.
  2. Export Packing Credit:

    • Export packing credit is a short-term working capital loan provided to exporters to finance the packing, processing, and pre-shipment expenses of goods meant for export. It helps exporters fulfill export orders without facing liquidity constraints.
  3. Post-Shipment Finance:

    • Post-shipment finance is provided to exporters after the shipment of goods. It helps cover working capital needs until payment is received from overseas buyers. This type of financing ensures that exporters can meet immediate cash requirements.
  4. Export Bill Discounting:

    • Export bill discounting allows exporters to receive immediate payment for their export bills by selling them to a bank or financial institution at a discount. This provides liquidity while waiting for overseas buyers to make payment.
  5. Export Factoring:

    • Export factoring involves selling accounts receivable to a financial institution (factor) at a discount. The factor then assumes responsibility for collecting payments from overseas buyers. Export factoring improves cash flow and reduces the risk of non-payment.
  6. Export Finance Guarantee:

    • Export credit agencies and government institutions may offer export finance guarantees to exporters. These guarantees protect exporters against the risk of non-payment by overseas buyers, facilitating access to trade finance.
  7. Foreign Currency Loans:

    • Exporters can avail foreign currency loans to finance international trade activities, especially when dealing with transactions denominated in foreign currencies. These loans can hedge against currency exchange rate fluctuations.
  8. Trade Credit Insurance:

    • Trade credit insurance policies protect exporters against the risk of non-payment by overseas buyers due to insolvency or other factors. It provides a financial safety net and enhances the confidence of exporters.
  9. Export Promotion Schemes:

    • The Government of India offers various export promotion schemes, such as the Merchandise Exports from India Scheme (MEIS) and the Export Promotion Capital Goods (EPCG) scheme. These schemes provide financial incentives, duty exemptions, and benefits to encourage exports.
  10. Venture Capital and Private Equity:

    • Some exporters may seek funding from venture capitalists or private equity investors to expand their operations, invest in technology, or enter new markets. These sources of capital can support long-term growth.
  11. Export Subsidies and Grants:

    • Government grants and subsidies may be available to exporters in specific sectors or for promoting exports to certain markets. These incentives can offset costs and boost export competitiveness.
  12. Export-Import Bank of India (EXIM Bank):

    • EXIM Bank provides financial products and services to support Indian exporters, including term loans, lines of credit, and export credit insurance.
  13. Trade Finance Instruments:

    • Exporters can utilize trade finance instruments such as letters of credit (LCs) and bank guarantees to facilitate international trade transactions and secure payment from overseas buyers.


Exporters should carefully assess their funding needs, cash flow requirements, and the specific demands of their export transactions to choose the most appropriate funding option(s).