India plans credit guarantees for small firms, exporters hit by US tariffs, sources say
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.
Loans that have not been repaid for 0-90 days fall under RBI's SMA 0-2 category, but are not classified as non-performing assets.
India's small businesses still struggle with limited access to timely and adequate formal credit.
The government will allocate about 40 billion rupees for providing guarantees to banks, both the sources said.
The scheme is designed for firms that are stressed due to external factors "beyond their control", and the eligibility criteria is 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 government estimates that about 55% of its merchandise exports to the United States will be subject to the tariff imposed by President Donald Trump's administration.
The finance ministry did not immediately respond to an email seeking comment.
Separately, 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 2025/26.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Wales Online
10 minutes ago
- Wales Online
DWP giving one-off payments of over £800 to households on certain benefits
DWP giving one-off payments of over £800 to households on certain benefits The Department for Work and Pensions (DWP) gives out one-off payments of up to 812 to benefits claimants to help with unexpected costs (Image: TkKurikawa via Getty Images) The Department for Work and Pensions (DWP) offers one-off payments of up to £812 to those claiming benefits, intended to assist with unexpected costs such as household items or travel expenses. However, it's important to note that any money borrowed must be repaid to the DWP. People receiving certain benefits can apply for one of these budgeting loan payments if they've been on these benefits for six months. Repayment is straightforward - you only have to pay back the amount you borrow, and repayments are automatically deducted from your benefits. This follows the Government's introduction of the Fair Repayment Rate in April, which prevents the DWP from deducting up to 25% from someone's Universal Credit standard allowance payment to repay debt, reports the Manchester Evening News. Read the biggest stories in Wales first by signing up to our daily newsletter here Eligibility for a Budgeting Loan Article continues below To qualify for a Budgeting Loan, you must have been receiving one or more of these benefits for the past six months: Income Support income-based Jobseeker's Allowance income-related Employment and Support Allowance Pension Credit If you moved from Universal Credit to Pension Credit, any time spent claiming Universal Credit will count towards the six months. However, you are not eligible if: you get New Style Jobseeker's Allowance or New Style Employment and Support Allowance you're involved in industrial action (for example a strike, walkout or lockout) you owe more than £1,500 in total for Crisis Loans and Budgeting Loans you currently get Universal Credit - the Government advises you to apply for a Budgeting Advance instead you currently receive Universal Credit - in this case, the Government advises you to apply for a Budgeting Advance instead. Potential Loan Amounts The minimum amount you can borrow is £100. You could receive up to: £348 if you're single £464 if you have a partner £812 if you or your partner claim Child Benefit What a Budgeting Loan Can Help With According to the Government website, a Budgeting Loan can help pay for: furniture or household items (for example, washing machines or other 'white goods') clothes or footwear rent in advance costs linked to moving house maintenance, improvements or security for your home travelling costs within the UK costs linked to getting a new job maternity costs funeral costs repaying hire purchase loans The Government has advised that those receiving Universal Credit, New Style Jobseeker's Allowance or New Style Employment and Support Allowance should not apply for a budgeting loan. Instead, they should apply for a Budgeting Advance to help with bills or other costs. The repayment of these advances is typically automated through regular Universal Credit payments over a six-month period. The amount you can receive depends on your circumstances and what the money is needed for. Examples of what you can get an advance for include: living costs before you get your first payment essential living costs if you've been sanctioned work or job interview costs emergency household costs funeral costs To apply, you can do any of the following: update your journal in your Universal Credit account ask a Universal Credit contact at your local jobcentre or your work coach call the Universal Credit helpline on 0800 328 5644 The Fair Repayment Rate, which was introduced recently, caps the largest amount the DWP can take for debt repayments at 15% of someone's standard allowance payments. This measure aims to help individuals repay their debts sustainably and ensure that the "poorest households" have more money each year, according to the DWP. The Chancellor introduced the Fair Repayment Rate at the Autumn Budget as part of wider efforts to raise living standards, combat poverty, and tackle the cost-of-living crisis. When the announcement was made on 30 April, Chancellor Rachel Reeves said: "As announced at the budget, from today, 1.2 million households will keep more of their Universal Credit and will be on average £420 better off a year. "This is our plan for change delivering, easing the cost of living and putting more money into the pockets of working people." Article continues below Join our WhatsApp community group where you can get the latest stories delivered straight to your phone
Wales Online
10 minutes ago
- Wales Online
DWP confirms Winter Fuel Payment deadline after UK Government U-turn
DWP confirms Winter Fuel Payment deadline after UK Government U-turn The Government announced its U-turn on the payments in June, meaning nine million pensioners in England and Wales will receive the Winter Fuel Payment from the DWP this winter (Image: Getty Images ) The Department for Work and Pensions (DWP) has set the deadline for pensioners who want to opt out of the Winter Fuel Payment. In a reversal of policy announced in June, nine million pensioners in England and Wales will receive the Winter Fuel Payment from the DWP this winter. Last year, payments were reduced as they became means-tested for the first time, with only those on certain benefits receiving the payment. This effectively lowered the income threshold to just £11,600, according to MoneySavingExpert. Read the biggest stories in Wales first by signing up to our daily newsletter here Under the new changes, all pensioners earning less than £35,000 a year will automatically receive a payment of either £200 or £300 this year. Those earning over £35,000 a year will have their Winter Fuel Payment automatically recovered by HMRC through PAYE or self-assessment after they receive it, reports the Manchester Evening News. Article continues below Pensioners earning above this threshold who wish to opt out of receiving the Winter Fuel Payment initially have until 15 September to inform the Government, according to the Mirror. The income eligibility is calculated per person. For instance, if you earn £30,000 a year and your partner earns £40,000, one person would retain their share of the Winter Fuel Payment while the other would repay it. You can verify whether your Winter Fuel Payment will be reclaimed by HMRC through the website. Katherine Ford, ICAEW Technical Manager, Tax, explained: "Pensioners have until Monday 15 September 2025 to contact HMRC to opt out of the Winter Fuel Payments if their total income for tax purposes is more than £35,000. "HMRC have a useful online tool to check if income is over this amount. If a person with income over £35,000 receives the payment, it will be recovered automatically through their pay as you earn tax code for 2026/2027, unless they are in self-assessment, in which case it will be added by HMRC to their tax return for 2025/2026." Should you be receiving one of these benefits during the qualifying week - which for this year runs from September 15 to 21 - and are above the State Pension age, then your payment will arrive automatically. The benefits that make you eligible for a Winter Fuel Payment include:. Two categories will be required to submit a claim either by post or telephone. Should you not receive any of these benefits, then you'll need to apply for your Winter Fuel Payment if either of the following circumstances apply:. Should you need to make a claim, postal applications will be available from September 15, whilst telephone applications open from October 15. Winter Fuel Payments are valued at £200 for qualifying households, or £300 for qualifying households containing someone aged over 80. Your eligibility hinges on your age at the end of the qualifying week. You won't qualify if you were hospitalised receiving free treatment for the entirety of the qualifying week, and the year prior to that, or if you were incarcerated during the qualifying week. Additionally, you won't be eligible if you resided in a care home continuously from 23 June 2025 or earlier and you're claiming certain benefits including Universal Credit and Pension Credit. In Scotland, the Winter Fuel Payment has been superseded by the new Pension Age Winter Heating Payment. Article continues below If you wish to opt out of receiving the Winter Fuel Payment, you can complete a form on the website or contact the Winter Fuel Payment Centre via post or telephone. Join our WhatsApp community group where you can get the latest stories delivered straight to your phone
BBC News
11 minutes ago
- BBC News
US warns of additional tariffs on India if Trump-Putin peace talks fail
US Treasury Secretary Scott Bessent has warned that Washington could increase secondary tariffs on India. He said the decision would depend on the outcome of President Donald Trump's meeting with Russian counterpart Vladimir Putin in Alaska on Friday."We've put secondary tariffs on Indians for buying Russian oil. And I could see, If things don't go well, then sanctions or secondary tariffs could go up," Bessent said in an interview to Bloomberg TV on Wednesday. Earlier this month, Trump imposed a 25% penalty on India in addition to 25% tariffs for buying oil and weapons from Russia. The US has been trying to mediate a ceasefire between Russia and Ukraine, and on Wednesday, Trump warned of "severe consequences" if Moscow did not agree to a peace and Putin are set to meet in Anchorage on Friday to discuss how to end the war in Ukraine."President Trump is meeting with President Putin, and the Europeans are in the wings carping about how he should do it, what he should do. The Europeans need to join us in these sanctions. The Europeans need to be willing to put on these secondary sanctions."Delhi's increased imports of cheap Russian crude since the Ukraine war have strained India-US relations and disrupted ongoing trade talks with oil made up 35% to 40% of India's oil imports in 2024 - up from 3% in has defended its purchases of Russian oil, arguing that as a major energy importer, it must buy the cheapest available crude to protect millions of poor Indians from rising comments come after he called India a "bit recalcitrant" on trade negotiations in an interview with Fox Business on Tuesday. Trump says his tariffs are part of his administration's plan to boost the US' economy and make global trade fairer. He has repeatedly called India a tariff abuser and is keen to trim a $45bn (£33bn) trade deficit with Asia's third largest economy. Trade negotiations between Delhi and Washington have been under way for several months, and are set to renew with US negotiators expected to arrive in India on 25 August. But experts say India's refusal to reduce duties on agriculture and dairy products has been a major thorn in the new 50% tariff rate on India is set to come into effect on 27 August, which some experts have said is akin to an embargo on trade between the two countries. It makes India the most heavily taxed US trading partner in Asia and is expected to severely hamper its exports focused industries like textiles and jewellery, and could drag India's growth down by as much as half a percent.
