Centre launches RELIEF scheme to support exporters amid West Asia crisis

The Centre announced the RELIEF scheme with a Rs 497 crore outlay to support Indian exporters affected by the West Asia conflict. The initiative will mitigate high logistics costs and insurance premiums to stabilize exports to the region.

The Centre today announced the Resilience & Logistic Intervention for Export promotion (RELIEF) scheme to support Indian exporters impacted by the ongoing conflict in West Asia. The initiative aims to provide a calibrated support package to stabilise export flows and protect India's market share during the crisis period.

The scheme focuses on mitigating the sharp rise in logistics costs and insurance premiums for shipments heading to the Gulf and West Asia. The details of the intervention were shared during a press briefing by the Commerce Secretary Rajesh Agrawal, who stated that the "Middle East conflict has an impact" and noted there are significant "challenges due to this conflict."

The Commerce Secretary also informed that "the government has come together to set up two inter-ministerial group in the Department of Commerce. We are meeting daily to assess the challenges. We are trying to listen to them and respond to them."

RELIEF Scheme Structure and Outlay

The RELIEF scheme is structured under the Export Promotion Mission (EPM) with a total financial outlay of Rs 497 crore. The Secretary explained that the government is "trying to build an export package" and that "in this conflict we are trying to help export keep going." The support is divided into three distinct components to address different segments of the exporting community, with the Export Credit Guarantee Corporation of India (ECGC) acting as the nodal and implementing agency.

Crisis Impact on Maritime Logistics

The urgency for intervention stems from crisis dynamics in the shipping corridor, particularly around the Strait of Hormuz. Maritime logistics have faced disruption, leading to the introduction of Additional War Risk Premiums and Emergency Conflict Surcharges.

According to the briefing data, freight rates on key routes rose by nearly 90 to 100 per cent within a short period during the Red Sea crisis of 2023-24. Outbound logistics costs increased due to vessel diversions and congestion at trans-shipment hubs, placing immense pressure on Micro, Small, and Medium Enterprises (MSMEs) with limited working capital.

Three-Pronged Support for Exporters

Component I: Support for Existing Shipments

Component I of the scheme provides export credit support for exporters already insured by ECGC for consignments issued between February 14 and March 15, 2026. The government will top up compensation for war and political risk losses beyond ordinary policy cover while keeping premiums at pre-disruption levels. The estimated support for Component I is Rs 56 crore

Component II: Enhanced Cover for New Exports

Component II targets upcoming exports from March 16 to June 15, 2026, offering stable premiums and enhanced cover of up to 95 per cent for fresh shipments into the affected region. The consignments destined for countries include the UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, Iran, Israel, and Yemen. The estimated support for Component II is Rs 159 crore.

Component III: Targeted Aid for MSMEs

Component III provides the largest share of support, with an estimated outlay of Rs 282 crore dedicated to non-ECGC-insured MSME exporters. This segment offers reimbursement of up to 50 per cent of the additional freight and insurance burden for consignments destined for countries including the UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, Iran, Israel, and Yemen.

The Secretary emphasized the importance of these markets, noting, "There is a dependence on our exports in these countries, and we are trying to see that even in these difficult circumstances, whatever exports we are able to do, we are trying to support that also."

Scheme Oversight and Expected Outcomes

To ensure transparency, ECGC will maintain a real-time monitoring dashboard for claims processing and fund utilization. An EPM Steering Committee will oversee the scheme, holding the authority to reallocate funds based on evolving conditions.

The government expects these measures to prevent order cancellations and support export-oriented sectors that depend on uninterrupted regional trade. (ANI)

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