Export & Import Finance for Indian MSMEs
Funding the Cross-Border Trade Cycle
India’s MSMEs are a genuine export force — the segment accounts for close to 45% of the country’s exports (Ministry of MSME, 2023). Yet cross-border trade carries a funding cycle that domestic transactions don’t: goods must often be procured or manufactured well before shipment, and payment from an overseas buyer can take weeks or months to arrive after goods leave Indian shores.
Export & import finance is built for exactly this cycle — funding that bridges the gap before shipment, after shipment, and for import purchases, so cash flow doesn’t become the constraint on a genuinely viable cross-border deal.
MSMEs contribute close to 45% of India’s exports (Ministry of MSME, 2023) — meaning export financing isn’t a niche corporate product, but a mainstream need across a huge share of India’s small business economy.
What is Export & Import Finance?
Export & import finance covers the funding instruments that support cross-border trade transactions, structured around three distinct points in the cycle: pre-shipment finance (funding before goods are dispatched), post-shipment finance (funding after dispatch, while awaiting buyer payment), and import finance (funding to complete an import purchase, often backed by a letter of credit). Each addresses a different point of cash-flow pressure in a cross-border deal.
What Sharan’s Export & Import Finance Covers
Pre-Shipment
Pre-Shipment Finance (Packing Credit)
Shipment
Goods dispatched to the overseas buyer
Post-Shipment
Post-Shipment Finance
Payment Realised
Overseas buyer’s payment realised
Import Finance
Funding to complete an import purchase, often structured alongside a letter of credit to assure the overseas supplier.
| Facility Type | What It Solves |
|---|---|
| Pre-Shipment Finance (Packing Credit) | Funding to procure raw materials, manufacture, and pack goods for export, disbursed before shipment against a confirmed export order or letter of credit |
| Post-Shipment Finance | Funding against export bills or documents once goods have shipped, bridging the gap until the overseas buyer’s payment is realised |
| Import Finance | Funding to complete an import purchase, often structured alongside a letter of credit to assure the overseas supplier |
A valid Importer-Exporter Code (IEC), established business operations, and documentation specific to the transaction — export order, shipping bill, bill of lading, or import purchase documentation, as applicable.
Cycle-Aligned Cross-Border Funding
Cross-border transactions don’t have a single funding need — they have several, at different points in the cycle. Sharan structures financing to move with your transaction: pre-shipment funding while goods are being prepared, transitioning to post-shipment funding once they’re on their way, so you’re not left carrying the full cash-flow gap alone at any single point.
An exporter receives a confirmed order from an overseas buyer with 60-day payment terms from the date of shipment. Sharan can structure pre-shipment finance to fund procurement and production ahead of dispatch, then transition the facility to post-shipment finance once the goods ship — bridging the full 60-day gap until the buyer’s payment is realised, rather than leaving the exporter to self-fund either stage.
Export & Import Finance vs. Trade Finance
This page covers financing tied specifically to cross-border shipments. For domestic trade instruments — letters of credit, bank guarantees, and invoice discounting for transactions within India — see our dedicated Trade Finance page. The two can also work together: a letter of credit, for instance, may support either a domestic or a cross-border transaction.
| If your need is... | Consider... |
|---|---|
| Funding before an export shipment goes out | Export & Import Finance — Pre-Shipment (Packing Credit) |
| Funding after export goods have shipped, awaiting buyer payment | Export & Import Finance — Post-Shipment Finance |
| Funding to complete an import purchase | Export & Import Finance — Import Finance |
| A domestic transaction or general payment assurance need | Trade Finance — LC, BG, or invoice discounting |
Export & Import Finance Eligibility Checker
Quick Self-Check — Do You Qualify?
If you tick 4 or more boxes, you are likely eligible. Speak to our export & import finance specialist to confirm.
How to Avail Export & Import Finance
Initial Enquiry & Shipment Cycle Discussion
Share your export order or import requirement and where you are in the cycle.
Document Submission
Submit KYC, business documents, IEC code, and transaction-specific documents (export order, shipping bill, or import purchase paperwork).
Credit Appraisal & Facility Structuring
We assess the transaction and your business profile, and structure the appropriate pre-shipment, post-shipment, or import facility.
Sanction Letter
Facility terms, amount, and structure are confirmed in writing before disbursal.
Disbursal & Relationship Onboarding
Funds are disbursed per the transaction cycle, with a dedicated relationship contact throughout.
Documents Typically Required
- KYC documents (identity and address proof of applicant/partners/directors)
- Business registration proof (partnership deed / incorporation certificate, as applicable)
- Valid Importer-Exporter Code (IEC)
- Export order, shipping bill, or bill of lading (for export-related facilities)
- Import purchase order or supplier invoice (for import finance)
- Last 12 months’ bank statements and GST returns, where applicable
Industry-Specific Use Cases
Manufacturer Exporter
Using pre-shipment finance to fund raw material procurement and production against a confirmed overseas order.
Trader Importer
Using import finance, often LC-backed, to complete purchases from an overseas supplier without disrupting domestic working capital.
Service Exporter
Using post-shipment-equivalent financing structures against confirmed overseas service contracts to bridge international payment cycles.
Agro-Exporter
Using pre-shipment finance timed to harvest and processing cycles, transitioning to post-shipment finance once export consignments are dispatched.
Export & Import Finance FAQs
1. What is the difference between pre-shipment and post-shipment finance?
Pre-shipment finance funds a business before goods are shipped — typically for procurement, production, and packing. Post-shipment finance funds a business after goods have shipped, bridging the gap until the overseas buyer’s payment is received.
2. Is an IEC (Importer-Exporter Code) mandatory to apply?
Yes. A valid IEC is a standard regulatory requirement for engaging in export or import activity in India, and is typically required as part of the eligibility documentation for export & import finance.
3. Does Sharan provide financing in foreign currency?
Financing structures and currency terms depend on the specific facility and transaction. Our team will confirm applicable currency and terms during structuring, based on your transaction’s requirements.
4. What documents are needed for post-shipment finance?
Typically required: shipping documents such as the bill of lading or shipping bill, the export invoice, and the underlying export order or letter of credit, alongside standard KYC and business documents.
5. Is collateral required for export or import finance?
Requirements vary by facility type and transaction size. Some structures may be assessed primarily against the underlying export order, letter of credit, or shipment documents, while others may require additional security. Our team will clarify what applies to your case.
6. Does this cover currency or exchange rate risk?
Export & import finance addresses the funding cycle around a shipment, not currency risk itself. If exchange rate exposure is a concern for your transaction, we recommend discussing hedging options as a separate consideration alongside your financing structure.
7. Can a first-time exporter apply?
Yes, though first-time exporters should expect a closer review of the underlying export order or contract, since there isn’t yet an established shipment history to draw on. A confirmed order or letter of credit strengthens the application significantly.