A practical support window for MSME exporters to meet global compliance requirements

India’s export ecosystem is increasingly shaped by product standards, certification requirements, testing protocols, traceability norms, and technical regulations imposed by importing countries. For many MSMEs, the cost of complying with these requirements becomes a major barrier to entering or expanding in global markets.

To address this challenge, the Government has introduced Trade Regulations, Accreditation & Compliance Enablement (TRACE) under the Export Promotion Mission (EPM) – Niryat Disha.

TRACE is designed to support MSMEs engaged in international trade by providing reimbursement for eligible conformity assessment and compliance related expenses. The objective is to strengthen India’s compliance readiness and improve market access for exporters.

What is TRACE

TRACE is a government support initiative that provides partial reimbursement of actual costs incurred by eligible MSMEs for meeting international quality, safety, and regulatory requirements.

The scheme is intended to reduce the financial burden of compliance and help exporters align with standards required by overseas buyers, regulators, and certification bodies.

Why TRACE matters for MSME exporters

Global trade today depends not only on price and product quality, but also on demonstrable compliance. Exporters are increasingly required to produce certifications, inspection reports, lab test results, audit reports, and traceability records before goods can be accepted in foreign markets.

For MSMEs, these costs can be substantial, especially when entering new markets or supplying to regulated sectors.

TRACE can help MSMEs by:

• lowering the cost of compliance
• improving access to regulated international markets
• supporting standardisation and quality assurance
• strengthening credibility with global buyers
• enabling participation in international value chains

Importantly, the support is structured as a compliance facilitation measure and is not linked to export performance, which makes it more accessible and practical for businesses building long term export capabilities.

Scope of support under TRACE

TRACE provides reimbursement for eligible expenditures incurred by MSMEs toward conformity assessment and related activities required under importing country regulations or international standards.

Eligible activities include:

• Testing
• Inspection
• Certification
• Audits
• Traceability systems
• Other conformity assessment activities mandated by importing countries or international standards

Effective date for eligible expenditure

The support is prospective and covers expenditures incurred from 20 February 2026 onwards

Annual reimbursement cap

Reimbursement is capped at:

• ₹25 lakh per IEC per financial year

Eligibility criteria

TRACE is available to MSMEs that meet the prescribed conditions.

Eligible entities

• MSMEs with an active Importer Exporter Code (IEC)
• MSMEs with a valid Udyam Registration
• MSMEs not appearing in the Denied Entity List
• Both manufacturing MSMEs and merchant MSMEs engaged in international value chains
  • Merchant MSMEs are eligible only for notified tariff lines

Exclusions

The following are excluded from the scope of support

• Deemed exports
• Exports to SEZs

Assistance available under TRACE

The scheme provides reimbursement on the basis of the type of certification or compliance requirement and the notified list category.

1) Positive List certifications

• Up to 60% reimbursement of actual cost
• Reimbursement is calculated on cost net of taxes, duties, cess, etc.
• Subject to the notified ceiling, whichever is lower

2) Priority Positive List certifications

• Up to 75% reimbursement of actual cost
• Reimbursement is calculated on cost net of taxes, duties, cess, etc.
• Subject to the notified ceiling, whichever is lower

Uniform treatment across MSME categories

The assistance rate is uniform for all MSMEs, irrespective of whether they are Micro, Small, or Medium enterprises.

Continued support after MSME graduation

MSMEs that outgrow the MSME classification can continue to receive support for three years, which provides continuity during the scale up phase.

Impact:
TRACE aims to make Indian MSMEs globally competitive by helping them comply with international standards, reducing trade barriers, and facilitating export growth without linking support to export performance.