INSTITUTIONAL FRAMEWORK : Institutional framework for providing finance comprises Reserve Bank of India, Commercial Banks, Export Import Bank of India and Export Credit and Guarantee Corporation. Reserve bank of India, being the central bank of country, lays down the policy framework and provides guidelines for implementation. Export finance short or medium term, is provided exclusively by the Indian and foreign commercial banks which are members of the Foreign Exchange Dealer's Association. The Reserve Bank of India function as refinancing institutions for short and medium term loans respectively, provided by commercial blanks.

Export Import Bank of India, in certain cases, participates with commercial bank in extending medium tern1 loans to exporters. Commercial banks provide finance at a concessional rate of interest and in turn are refinanced by the Reserve Bank Export Import Bank of India at concessional rate. In case they do not wish to avail refinance, they are entitled for an interest rate subsidy. Export Credit & Guarantee Corporation (ECGC) also plays an important role through its various policies and guarantees providing cover for commercial and political risks involved in export trade.