India’s international trade ecosystem has entered a decisive phase. As global supply chains realign, tariffs re-emerge as strategic tools, and financing costs remain uneven across markets, the role of domestic policy in sustaining export–import momentum has become more critical than ever. Against this backdrop, Union Budget 2025 marked an important inflection point, one that moved beyond incremental incentives to lay the foundation for a more structured, finance-led approach to trade growth.
As the country now looks ahead to Union Budget 2026, to be tabled in February, it is timely to examine what was offered in Budget 2025, how India’s trade ecosystem responded over the year, and what expectations naturally arise from this trajectory.
Budget 2025: Reframing Trade Growth as a System, Not a Scheme
A defining feature of Budget 2025 was its acknowledgement that India’s export ambitions could no longer be driven by fragmented schemes or short-term relief measures. Instead, the government signalled a transition toward institutional, long-horizon trade enablement, anchored in finance access, digital infrastructure, and logistics efficiency.
At the heart of this shift was the announcement of the Export Promotion Mission (EPM), a unified framework designed to bring coherence to India’s export support architecture. The subsequent approval of the mission with an outlay of ₹25,060 crore for FY26–31 transformed a Budget announcement into a long-term execution platform. By merging multiple export-related schemes under one umbrella, EPM aimed to reduce duplication, improve accountability, and create clearer pathways for exporters, particularly MSMEs to access support.
Crucially, the mission placed export credit, cross-border factoring, and mitigation of non-tariff barriers at the centre of its objectives. This marked an important departure from earlier approaches that focused largely on incentives, without adequately addressing the financing bottlenecks that restrict exporters’ ability to scale.
While the Export Promotion Mission established the institutional architecture, its true strategic weight lay in how it redefined the role of trade finance.
Trade Finance Moves to the Forefront
Budget 2025 recognised a reality long acknowledged by exporters: competitiveness in global markets is as much about access to liquidity as it is about product quality or pricing. For MSME exporters in particular, delays in payments, high collateral requirements, and uneven access to credit continue to constrain growth.
Within the Export Promotion Mission, the government introduced the Niryat Protsahan sub-scheme, which focused squarely on lowering the cost of export finance. This included interest subvention on pre- and post-shipment export credit and collateral support aimed at reducing lender risk and improving credit flow. Importantly, these measures were designed to run through 2031, offering exporters predictability, a critical requirement for long-term planning.
Complementing this was the approval of a ₹20,000 crore Credit Guarantee Scheme for Exporters, offering 100% credit guarantee coverage through the National Credit Guarantee Trustee Company. By de-risking incremental export lending, the scheme sought to unlock additional working capital without placing undue strain on the banking system.
Together, these initiatives repositioned trade finance from a peripheral support function to a core instrument of export strategy.
Digital Trade Infrastructure: Laying the Rails for Scale
Another significant pillar of Budget 2025 was the emphasis on digital public infrastructure for trade, most notably through the announcement of Bharat Trade Net (BTN). Envisioned as a unified digital platform for trade documentation and export financing, BTN aims to simplify compliance, improve transparency, and reduce the paperwork burden that often weighs heavily on exporters.
By aligning BTN with existing platforms such as the Unified Logistics Interface Platform and global best practices, the government signalled its intent to modernise India’s trade processes end-to-end. Over the course of the year, this focus on digitisation began to shape conversations around faster credit decisions, better data-sharing, and improved traceability, all essential for efficient trade finance and risk assessment.
While still evolving, BTN represents a foundational step toward a digitally enabled, interoperable trade ecosystem, capable of supporting scale without proportionate increases in friction.
Infrastructure, Customs and Sectoral Competitiveness
Budget 2025 also addressed structural cost disadvantages through targeted infrastructure and customs interventions. Plans to upgrade logistics and air cargo infrastructure, particularly for perishable and high-value exports, were aimed at reducing transit times and improving reliability. At the same time, customs duty rationalisation and duty-free input measures for select sectors such as handicrafts and leather sought to enhance cost competitiveness in global markets.
These measures reinforced a broader understanding that export growth depends not only on financing and policy support, but also on speed, predictability, and cost efficiency across the supply chain.
How India’s Trade Ecosystem Responded in 2025
The true test of Budget 2025’s reforms was not in the announcement, but in their performance amid global volatility. The months following Budget 2025 tested these initiatives against a complex global environment. Tariff-related disruptions, particularly in key markets such as the United States, underscored the vulnerability of exporters to external shocks. In response, the government approved a ₹5,100 crore export support package, including enhanced credit guarantees for exporters affected by tariff pressures.
Trade facilitation notices during the year also reflected expanded collateral-backed export credit support for MSMEs, with guarantees of up to ₹10 crore. These interventions helped stabilise liquidity for smaller exporters, enabling them to navigate volatility without retreating from global markets.
While challenges persisted, the overall response suggested that exporters equipped with better access to credit and risk-sharing mechanisms were more resilient, reinforcing the policy logic introduced in Budget 2025.
MSMEs at the Centre of the Trade Agenda
Across these initiatives, a consistent theme emerged: MSMEs were placed at the heart of India’s trade strategy. As the largest contributors to employment and a growing share of exports, micro and small enterprises stand to benefit disproportionately from improved access to working capital, digital documentation, and structured credit support.
Beyond volume contribution, MSMEs play a critical role in export diversification. A broader base of smaller exporters naturally expands India’s product basket and geographic reach, reducing over-reliance on a handful of sectors or destination markets. In a global environment marked by tariff shifts and demand volatility, such diversification enhances systemic resilience.
MSMEs also form the backbone of India’s integration into global value chains. As suppliers, subcontractors, and specialised manufacturers within larger export networks, they enable tiered production structures that align with international supply chain models. Improved access to formal financing and digital trade infrastructure allows these enterprises to participate more confidently in cross-border transactions, meet compliance standards, and scale within global production ecosystems.
From a macroeconomic perspective, a distributed MSME export base reduces concentration risk. When export growth is spread across thousands of enterprises rather than concentrated among a few large players, volatility is absorbed more effectively. This risk-distributed model strengthens the overall stability of India’s export engine.
Budget 2025’s emphasis on collateral-free and guarantee-backed financing, coupled with digital facilitation, signalled a recognition that MSME competitiveness is essential to export diversification and deeper integration into global value chains.
Expectations from Budget 2026: Building on Momentum
As policymakers prepare to table the Union Budget 2026, expectations are naturally shaped by the trajectory set over the past year. The focus is likely to shift from announcement to execution, and from pilots to scale.
As Munindra Verma, CEO, M1 NXT, notes:
“Budget 2026 comes at a critical moment for strengthening India’s export and import ecosystem. Access to timely and affordable trade finance remains a key constraint, particularly for MSME exporters. The Budget must prioritise low-cost working capital supported by effective risk-management frameworks to help Indian businesses compete confidently in global markets.”
Building on Budget 2025, Budget 2026 will be expected to deepen trade finance reforms, strengthen risk-sharing mechanisms, and accelerate the integration of digital platforms with financing flows. Greater clarity on documentation standards, data-sharing frameworks, and cross-border financing structures could further reduce friction and enhance exporter confidence.
From Policy Intent to Sustainable Trade Growth
Budget 2025 marked a meaningful shift in India’s approach to international trade — from fragmented support to structured enablement. By placing trade finance, digital infrastructure, and MSME inclusion at the centre of policy, it laid the groundwork for a more resilient export–import ecosystem.
As India looks toward Budget 2026, the opportunity lies in consolidating these gains — ensuring that access to liquidity, risk mitigation, and digital efficiency translate into sustained global competitiveness. For exporters navigating an increasingly complex world, the journey from intent to impact will define the next phase of India’s trade growth story.