Last Updated: October 27, 2026 by Pratham Agarwal, Rasp International
The short answer
Support for Alternative Trade Instruments offers a Micro, Small or Medium Enterprise (MSME) exporter 2.75 percent on export factoring interest, up to Rs 50 lakh a financial year, under Directorate General of Foreign Trade (DGFT) Trade Notice 25/2025-26 dated 20 February 2026. Since Trade Notice 32/2026-27 dated 26 October 2026, your Factor uploads each transaction on the DGFT portal and you file the claim. Any approved amount is paid into the bank account linked to your Importer Exporter Code (IEC).
The rule that decides everything: you can claim only what your Factor has uploaded against your IEC on the DGFT portal, and you must file within two months of that upload, under Trade Notice 32/2026-27 Annexure-I Part III.
Verified as on 27 October 2026 against DGFT Trade Notice 25/2025-26 dated 20 February 2026, Trade Notice 32/2026-27 dated 26 October 2026, Trade Notice 29/2026-27 dated 1 October 2026 and the DGFT Factors Workflow User Guide version 1.0 of September 2026. Written by Pratham Agarwal, Founder, Rasp International.
2.75%
on the factoring interest cost, Trade Notice 25/2025-26 Annexure-II para 5(a)
Rs 50 lakh
ceiling per MSME a financial year, Trade Notice 25/2025-26 Annexure-II para 5(b)
2 months
to file after the Factor’s upload, Trade Notice 32/2026-27 Annexure-I Part III
20 Feb 2026
earliest Export General Manifest (EGM) filing date that counts, Trade Notice 32/2026-27 Annexure-I Part IV
| Scheme | Support for Alternative Trade Instruments (export factoring interest subvention) |
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| Part of | Niryat Protsahan, the finance arm of the Export Promotion Mission (EPM) |
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| Run by | EPM Section, DGFT Headquarters (Trade Notice 25/2025-26 Annexure-III) |
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| Legal basis | DGFT Trade Notice 25/2025-26, amended and clarified by Trade Notice 32/2026-27 |
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| Who it is for | MSMEs with an active IEC and a valid Udyam Registration (the MSME registration number), exporting goods on the Annexure-V list |
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| What you get | 2.75 percent on the interest cost of recourse or non-recourse factoring, in rupees or a freely convertible currency (Trade Notice 25/2025-26 Annexure-II para 5(a)) |
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| Cap | Rs 50 lakh per MSME a financial year (Trade Notice 25/2025-26 Annexure-II para 5(b)), separate from the interest subvention ceiling (Trade Notice 32/2026-27 Part V(ii)) |
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| Validity or window | Pilot with no end date printed (Trade Notice 25/2025-26 para 5). You file within two months of the Factor’s upload |
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| Where you apply | DGFT portal: Services, then Export Promotion Mission, then Support for Alternative Trade Instruments, then Apply for Claim of Support |
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Why this page exists
The Press Information Bureau (PIB) backgrounder of 24 February 2026 told exporters to share a Unique Identification Number (UIN) with the factoring entity, and called the 2.75 percent a subvention on the factoring cost. Trade Notice 32/2026-27 has since deleted the UIN for factoring, and Trade Notice 25/2025-26 Annexure-II para 3(b) applies the rate to the interest cost element only.
We are an ISO 9001:2015 certified export and import and DGFT advisory firm, founded in 2019, that has served 500 plus exporters.
What export factoring support is
Support for Alternative Trade Instruments is an interest subvention scheme (the government pays back part of your interest) that lowers the cost of export factoring for MSME exporters, run by the EPM Section of DGFT under Niryat Protsahan.
Export factoring is a way to be paid early for an export invoice. You assign the invoice (transfer your right to collect it) to a Factor, a bank or finance company, which pays you an advance and later collects from your overseas buyer. In recourse factoring you repay the Factor if the buyer defaults. In non-recourse factoring the Factor bears that loss.
Illustrative example: you ship Rs 50 lakh of goods on 90 days credit and the Factor advances Rs 40 lakh. On day 90 the buyer pays the Factor, which keeps its advance, interest and fees and pays you the balance. The scheme works only on the interest part.
It is one of five finance schemes under the Sub-Committee on Trade Finance (Trade Notice 29/2026-27). Our Export Promotion Mission guide maps them, and our trade finance page compares factoring with bill discounting.
What you get
Below, “para” means Trade Notice 25/2025-26 Annexure-II and “Part” means Trade Notice 32/2026-27 Annexure-I, unless another notice is named.
| Item | What the notice says |
|---|
| Rate | 2.75 percent on the factoring interest cost element (paras 3(b) and 5(a)) |
| Ceiling | Rs 50 lakh per MSME a financial year, across all your Factors (paras 5(b) and 4(f)) |
| Factoring covered | Recourse and non-recourse, in Indian rupees or a freely convertible foreign currency (para 2) |
| Factor’s price | Stays at the Factor’s commercial discretion (para 6(a)) |
| Rate review | Twice a year, preferably in the last week of March and September. A revised rate covers only factoring on or after its notification (paras 4(b) and 4(e)) |
| Payment | To the bank account linked to your IEC after approval (Part III) |
| Not covered | Deemed exports and exports to Special Economic Zones (SEZ) (para 4(d)). Fees are not stated as covered |
Part II names three set-ups, each with its own filing trigger (the event after which the Factor uploads):
| Modality | How it works | Factor uploads |
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| M1, advance factoring | Advance upfront, interest deducted or accrued | One record per tranche, after the buyer pays |
| M2, revolving facility | Interest on the average balance each billing period | One record per period, after it closes. Subvention is computed only once the buyer payment date is given |
| M3, bullet interest | Advance upfront, all interest charged at buyer settlement | One record per tranche, after the buyer pays |
Who can apply and who cannot
Who can apply
- An MSME with a valid active IEC not in the Denied Entity List (DEL) and a valid Udyam Registration (para 1(a)).
- Exporting goods whose six digit Harmonised System (HS) code is in Annexure-V (para 1(c)).
- Factoring with an Authorised Dealer bank (a bank licensed for foreign exchange), a factoring company or another entity regulated by the Reserve Bank of India (RBI) or the International Financial Services Centres Authority (IFSCA) (para 2).
- For exports whose EGM (the carrier’s filing that lists your shipping bill) was filed on or after 20 February 2026 (Part IV).
- A unit that outgrows its MSME category stays eligible for three years from re-classification (para 4(g)).
Who cannot apply
- Large enterprises (para 1(a)), deemed exports and supplies to SEZ units (para 4(d)).
- Goods from chapters with no Annexure-V line, such as Chapter 02 (meat), 24 (tobacco), 27 (mineral fuels) and 72 (iron and steel).
- An exporter under investigation, debarred or blacklisted under trade laws (Trade Notice 25/2025-26 Annexure-IV, claim form declaration item 1).
- An invoice already in a post-shipment interest subvention claim (Part V(i)).
Documents that get it through
The Factor uploads each transaction, and the exporter files within two months of that upload.| Document | What the authority checks | The mismatch that brings a query or rejection |
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| IEC | Your identity at every stage and the account that is paid (Parts I and III) | Factor uploads under a group company’s IEC, or the bank account in your IEC profile is old |
| Shipping bill and EGM | EGM filing date fixes the export date (Part IV). Number, date, Free on Board (FOB) value and ports are keyed (User Guide section 3.2) | EGM filed before 20 February 2026, or FOB value keyed differently from your copy |
| Commercial invoice | Number, date, currency and value (User Guide section 3.2) | The same invoice also sits in a bank interest subvention claim (Part V(i)) |
| Factoring agreement | Reference ID, assignment date, advance rate, tenor and factoring type (User Guide section 3.3), with proof of factoring uploaded (Trade Notice 25/2025-26 Annexure-IV) | A loan against the receivable without assignment, which the Factoring Regulation Act, 2011 does not treat as factoring (RBI FAQs) |
| Factor’s interest statement | Benchmark, margin and interest charge entered apart from fees (User Guide section 3.4) | One all-in discount, so the interest cost cannot be seen |
| HS code on the shipping bill | Code in Annexure-V, and you answer for claiming only eligible lines (para 1(e)) | Code outside the list, which leads to recovery if claimed |
For each invoice, give your Factor your IEC, the invoice and shipping bill details, Incoterms (the agreed sale term), buyer name and country and, once the buyer pays, the payment date and amount.
How to apply, stage by stage
1
Before: check the product and the Factor
Find your HS code in Annexure-V. Confirm the Factor is an Authorised Dealer bank or RBI or IFSCA regulated. The RBI list of registered non-banking financial companies (NBFCs) marks NBFC-Factors as Factor.
2
Before: confirm your Factor is on the DGFT portal
The Factor registers as a Bank Official with the function Factors, and DGFT approves its Administrator (User Guide section 1).
3
Before: pick one scheme per invoice
Each invoice goes to factoring support or a post-shipment interest subvention claim, never both (Part V(i)).
4
Filing: the Factor uploads
Through My Dashboard, then Factoring Application Room, then Start Fresh Application, within one month of the filing trigger (Parts II and III).
5
Filing: you review and claim
Open Apply for Claim of Support, disable every ineligible record, confirm the rest and file with digital authentication and the declaration (Part III).
6
After: approval and payment
Once the Competent Authority approves the claim, the sanctioned amount is credited to your IEC bank account (Part III). No processing time is printed. Keep the total across Factors within Rs 50 lakh (para 4(f)).
Deadlines
You file consolidated claims monthly, not later than two months from the Factor’s upload (Part III). For transactions before 26 October 2026 the limits run from that date, and Part IV keeps exports from 20 February 2026 claimable once the portal is operational. No late claim rule is printed.
Illustrative example: under M1, your buyer pays the Factor on 10 January 2027. The Factor uploads by 10 February 2027. If it uploads on 5 February, you file by 5 April 2027.
Do not wait for a UIN: Part I deleted the intent and the UIN for factoring, and UINs already generated cease to have effect.
Factoring export invoices and unsure what to claim
We prepare and file the claim end to end in your unit’s own name, or guide your team.
Where claims go wrong
| Failure | What you see | What actually broke |
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| Waiting for a UIN | Nothing moves | The UIN was deleted (Part I). The September 2026 User Guide still shows a UIN field |
| Empty claim screen | No records for months you factored | The Factor is not registered, has not uploaded or used another IEC (Part III) |
| One invoice, two schemes | Full recovery with interest | Part V(i) bars it and Part V(iii) adds penal action |
| Records not cleaned | Recovery after payment | An SEZ supply or off-list code left in (paras 1(e) and 4(d)) |
| Two Factors, one ceiling | Part of the payment taken back | Total crossed Rs 50 lakh (para 4(f)) |
| Window missed | Claim out of time | Two months from upload passed (Part III) |
How it fits with other schemes
| Scheme | What it pays for | With factoring support |
|---|
| EPM interest subvention | 2.75 percent a year on rupee export credit, up to Rs 50 lakh a year (Trade Notice 20/2025-26 para 2) | Both at once, separate ceilings, never on the same invoice or interest (Part V) |
| Collateral Support | Cover through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) of up to 85 percent for micro and small and 65 percent for medium exporters (Trade Notice 21/2025-26 para 2(i)) | Not addressed. Check with the lending bank |
| E-commerce exporter credit | 2.75 percent subvention, capped at Rs 15 lakh a year (Trade Notice 31/2025-26 Annexure-II paras 5(b) and 5(c)) | Not addressed. Check with the Export-Import Bank of India (Exim Bank) |
| Emerging Export Opportunities | Risk sharing on letters of credit and similar instruments for under-served markets (Trade Notice 32/2025-26, a different notice) | A letter of credit route, not addressed by Part V. Check with Exim Bank |
The claim declaration bars the same activity being supported under any other central or state scheme (Trade Notice 25/2025-26 Annexure-IV, item 6).
Illustrative example: you factor invoices A and B and finance invoice C with bank post-shipment credit. A and B go under factoring support and C under interest subvention. Each scheme counts its own Rs 50 lakh (Part V(ii)). Our Export Promotion Mission blog has the history.
What export factoring support will not do
It will not set the Factor’s price
The Factor sanctions on its own due diligence and sets its rate (paras 3(a) and 6(a)).
It will not cover every export
Deemed exports, SEZ supplies and goods outside Annexure-V get nothing (paras 1(c) and 4(d)).
It will not pay twice
A duplicate or excess claim brings full recovery with interest and penal action under the Foreign Trade (Development and Regulation) Act, 1992 (Part V(iii)).
How Rasp International handles export factoring support
When you engage Rasp International, we prepare and file your claim end to end, always in your unit’s own name. If you prefer to file yourself, we guide your team.
We sign a non-disclosure agreement (NDA) and a service level agreement (SLA) with every client. You and we both hold the portal logins, kept safe and confidential. Documents sit in encrypted storage. We give an authority letter only when you ask. We hold no customs broker (CHA) licence; licensed CHA partners across India handle customs clearance. See how we work.
Factored invoices since 20 February 2026
Send your IEC, Factor’s name and invoices. We tell you which records may be claimable, subject to approval and the available budget.
What Is Not Yet Notified, Checked on 27 October 2026
- When the portal became operational for exporter claims. Part III counts older limits from 26 October 2026, Part IV from operationalisation. Work to the earlier date and check with the EPM Section of DGFT.
- How the 2.75 percent is computed, whether any fee counts and how foreign currency is converted. Check with the EPM Section of DGFT.
- Whether the Factor’s screen still needs a UIN. User Guide section 3.1 opens with one. Your Factor should check with the EPM Section of DGFT.
- Packing credit on a factored order. Part V(i) covers post-shipment credit only. Check with the EPM Section of DGFT.
- Merchant exporters and services. Neither is named, and Annexure-V lists only goods, though the claim form mentions services. Check with the EPM Section of DGFT.
- Annexure-V is headed 4,139 lines but has 4,185 rows. If in doubt, check your code with the EPM Section of DGFT.
- The Electronic Bank Realisation Certificate (eBRC) for factored invoices. Trade Notice 20/2026-27 dated 12 August 2026 only invited comments on a draft procedure. Check with your Factor and your Authorised Dealer bank.
Frequently asked questions
What is export factoring?
Export factoring means you assign an export invoice to a Factor, a bank or finance company, which pays you an advance before your overseas buyer pays and later collects from the buyer. RBI requires companies doing factoring business to register under the Factoring Regulation Act, 2011.
What is the interest subvention rate on export factoring?
The rate is 2.75 percent on the interest cost element of eligible export factoring, under Trade Notice 25/2025-26 Annexure-II para 5(a). It is reviewed twice a year, preferably in March and September. A revised rate applies only to factoring on or after its notification.
What is the maximum export factoring subsidy in a year?
Rs 50 lakh per MSME in a financial year, under Trade Notice 25/2025-26 Annexure-II para 5(b). With two or more Factors, keeping the total inside Rs 50 lakh is your job and any excess is liable to recovery. Trade Notice 32/2026-27 keeps this ceiling separate from the interest subvention ceiling.
Who files the export factoring subvention claim?
Your Factor uploads each transaction on the DGFT portal within one month of its filing trigger, which counts as its claim on your behalf. You then review the records, disable any that are not eligible and file within two months of the upload, under Trade Notice 32/2026-27 Annexure-I Part III.
Do I still need a UIN for export factoring support?
No. Trade Notice 32/2026-27 dated 26 October 2026 deleted the declaration of intent and the Unique Identification Number for this scheme. Your IEC identifies you at every stage, and UINs already generated cease to have effect. Interest subvention keeps its own UIN rules.
Which factoring companies qualify for the subvention?
Factoring from an Authorised Dealer bank, a factoring company or another entity regulated by RBI or IFSCA qualifies, under Trade Notice 25/2025-26 Annexure-II para 2. Check an NBFC in the RBI list of registered NBFCs, and ask whether the Factor is registered on the DGFT portal.
Can I take export factoring support and interest subvention together?
Yes. Trade Notice 32/2026-27 Annexure-I Part V lets an MSME use both at once, each with its own annual ceiling. One invoice or receivable cannot be claimed under both, and the interest cannot be claimed twice. A duplicate claim brings full recovery with interest and penal action.
What is the last date to claim export factoring subvention?
You file monthly and not later than two months from the date your Factor uploads the transaction, under Trade Notice 32/2026-27 Annexure-I Part III. For transactions before 26 October 2026 the limits run from that date. No route for a late claim is printed.
Is non-recourse or foreign currency factoring covered?
Yes. Trade Notice 25/2025-26 Annexure-II para 2 covers recourse and non-recourse factoring, in Indian rupees or a freely convertible foreign currency. Interest subvention, by contrast, covers rupee credit only. No method for converting foreign currency interest into rupees is printed yet.
Are SEZ supplies and deemed exports covered by factoring support?
No. Trade Notice 25/2025-26 Annexure-II para 4(d) excludes deemed exports, as defined in Chapter 7 of the Foreign Trade Policy, and exports to Special Economic Zones. If your Factor uploads such an invoice, disable that record on your claim screen before you file.
Where is the factoring subvention paid?
Into the bank account linked to your IEC, after the Competent Authority approves your claim, under Trade Notice 32/2026-27 Annexure-I Part III. It is not paid to the Factor and does not change the Factor’s rate. Check your IEC bank details before you file.
Are factoring fees covered by the subvention?
The notices say the subvention is on the export factoring interest cost element. The claim data lists factoring, processing, handling and set-up fees apart from interest, and no notice says fees are covered. Treat fees as outside it and check with the EPM Section of DGFT.
Sources
- Tier 1. DGFT Trade Notice 25/2025-26 dated 20 February 2026: content.dgft.gov.in.
- Tier 1. DGFT Trade Notice 32/2026-27 dated 26 October 2026: content.dgft.gov.in.
- Tier 1. DGFT Trade Notice 29/2026-27 dated 1 October 2026: content.dgft.gov.in.
- Tier 1. DGFT Factors Workflow User Guide version 1.0, September 2026: content.dgft.gov.in.
- Tier 1. DGFT Trade Notice 20/2025-26 dated 2 January 2026: content.dgft.gov.in. Trade Notices 21/2025-26, 31/2025-26, 32/2025-26 and 20/2026-27: DGFT trade notices.
- Tier 1. RBI FAQs on NBFCs, questions 46 and 47: rbi.org.in; list of registered NBFCs: rbi.org.in.
- Tier 1. PIB backgrounder on the Export Promotion Mission, 24 February 2026: pib.gov.in.
This is general guidance. Rules change. Check the current notification or trade notice, or speak to us, before you act.
Related: EPM interest subvention on export credit | Export Promotion Mission schemes | trade finance for exporters