The Centre on Thursday introduced a Rs 500 crore relief package to support exporters affected by disruptions in trade with the Middle East. The move comes amid ongoing tensions linked to the Iran war and the blockade of the Strait of Hormuz, which have increased logistics costs and insurance risks.
RELIEF scheme to stabilise exports
Lav Agarwal, Director General of Foreign Trade, announced the 'Resilience and Logistics Intervention for Export Facilitation (RELIEF)' scheme under the Export Promotion Mission. The initiative aims to provide targeted and time-bound support to exporters facing rising costs and uncertainty.
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The government-owned Export Credit Guarantee Corporation (ECGC) will implement the scheme.
Three-part structure of support
The RELIEF scheme is divided into three components to cover different categories of exporters and shipments.
The first part focuses on exporters who already have insurance coverage. With an estimated allocation of Rs 56 crore, it will support consignments where the lading bill was issued between February 14 and March 15. These shipments are destined for countries, including the UAE, Saudi Arabia, Kuwait, Qatar, Iran, Oman, Bahrain, Iraq, Israel and Yemen. The support aims to keep premiums at pre-disruption levels and provide compensation for war-related losses.
The second component, with an outlay of Rs 159 crore, targets upcoming exports. It applies to consignments with lading bills issued between March 16 and June 15. Under this, exporters will be brought under ECGC coverage while maintaining the same premium burden. The ECGC may offer enhanced protection of up to 95 per cent of losses.
The third component is designed for MSME exporters who are not insured by the ECGC. With an allocation of Rs 282 crore, it will cover shipments between February 14 and March 15.
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This part includes coverage for additional war risk premiums and higher shipping costs due to route disruptions. Support will be capped at Rs 50 lakh per exporter, based on actual losses. Exporters may also receive reimbursement of up to 50 per cent for increased freight and insurance costs.
Addressing rising costs and uncertainty
The scheme is aimed at reducing the financial strain on exporters and ensuring continuity in shipments to the Gulf and West Asia. It seeks to cushion the impact of disrupted trade routes and stabilise export flows during a period of heightened geopolitical tension.
