Modi government plans relief for MSMEs amid West Asia crisis
What's the story
The Indian government is mulling over the idea of introducing more economic relief packages for vulnerable sectors, including MSMEs. The move comes in light of the ongoing West Asia crisis and its impact on global crude prices and supply chains. Earlier this month, the government had reduced excise duty on petrol and diesel to shield consumers from rising global crude prices.
Relief initiatives
India reimposes export duties on diesel, ATF
The Indian government has also reimposed duties on diesel and aviation turbine fuel (ATF) exports, hoping to boost domestic availability. These steps are part of a broader strategy to protect the economy from escalating costs and potential disruptions caused by the West Asia crisis. Earlier this month, exporters were given some relief in meeting their export obligations amid difficulties in goods movement due to the ongoing conflict.
Exporter support
Indian government launches ₹497cr relief scheme
To counter the challenges of surging freight costs, high insurance rates, and war-related export risks, a new scheme called Resilience & Logistics Intervention for Export Facilitation (RELIEF) was launched. The ₹497 crore initiative aims to keep India's supply chains resilient, protect MSME exporters from order cancellations, and safeguard jobs in the export sector. On Monday, the government restored full benefits under the RoDTEP scheme to help exporters dealing with high freight costs.
Risk assessment
What did CEA V Anantha Nageswaran say?
The ongoing conflict has led to vessel diversions, longer sailing routes, congestion at transshipment hubs, and also emergency conflict-linked surcharges. These factors have raised logistics costs and created operational uncertainty for export consignments traveling to or through the region. Chief Economic Advisor V Anantha Nageswaran stressed on the need for immediate relief to vulnerable businesses and households while creating fiscal space for strategic long-term needs highlighted by this conflict.