Centre launches ₹500cr relief scheme as US-Iran war disrupts exports
What's the story
The ongoing conflict in West Asia has resulted in major shipment delays for Indian exporters. The disruption of trade routes due to the crisis is affecting the movement of goods and increasing logistics costs. In response, the Indian government has formed an inter-ministerial group to address these challenges and support affected exporters.
Government response
Group monitoring situation, talking to exporters
The inter-ministerial group is keeping a close eye on the situation and talking to exporters. Departments such as shipping and customs have taken steps to help exporters. The Customs department has issued guidelines for dealing with export cargo that is returning to Indian ports due to maritime route disruptions, including the closure of the Strait of Hormuz.
Export facilitation
Government launches relief initiative for exporters
To help Indian exporters deal with trade disruptions caused by the West Asia conflict, the government has launched a new initiative called a ₹497 crore Resilience & Logistics Intervention for Export Facilitation (RELIEF). Commerce Secretary Rajesh Agrawal said the scheme is part of the government's larger Export Promotion Mission and was developed based on industry feedback.
Scheme details
Scheme part of larger export promotion mission
Agrawal described the RELIEF scheme as a "calibrated support package" aimed at stabilizing export flows and protecting India's market share during the crisis. The initiative is primarily aimed at easing operational challenges for micro, small and medium enterprises (MSMEs) and ensuring smoother trade movement. It will provide support to both insured exporters and non-ECGC insured MSME exporters for one month, covering future shipments for up to three months.
Cost coverage
Support will be routed through ECGC mechanisms
The RELIEF scheme mainly aims to offset higher freight and insurance costs due to the disruption. "The aim is to reduce extraordinary freight and insurance burden and address challenges specific to Indian exporters," Agrawal said, adding that support will be routed through ECGC mechanisms. The government will fund this initiative through the existing Export Promotion Mission budget, without any additional financial allocation.