Government Unveils Rs 497-Crore Relief Scheme for Exporters Affected by Middle East Conflict
The Indian government has unveiled the RELIEF (Resilience & Logistics Intervention for Export Facilitation) scheme, allocating ₹497 crore to assist exporters grappling with challenges stemming from the ongoing conflict in the Middle East. This initiative aims to mitigate the impact of soaring freight costs, increased insurance premiums, and shipping delays that have arisen due to the regional turmoil. The scheme, part of the Export Promotion Mission, will be managed by the Export Credit Guarantee Corporation of India (ECGC) and is specifically designed to support exporters affected by disruptions in 17-18 conflict-impacted markets.
Daily Monitoring Mechanism Established
In response to the ongoing trade disruptions, the Indian government has formed an inter-ministerial group (IMG) that includes representatives from various ministries, such as commerce, petroleum and natural gas, and external affairs. This group is tasked with daily assessments of the evolving cargo movement situation and determining the necessity for further interventions. Commerce Secretary Rajesh Agarwal emphasized the significant challenges posed by the Middle East conflict, stating that the government is committed to listening to exporters’ concerns and responding effectively. The IMG’s daily meetings aim to ensure that the government remains proactive in addressing the issues faced by exporters.
Targeting Key Gulf and Middle East Export Corridors
The RELIEF scheme primarily focuses on consignments destined for major Gulf and Middle Eastern markets, including the UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, Iran, Israel, and Yemen. The urgency of this initiative is underscored by disruptions around the Strait of Hormuz, which have led to increased war-risk premiums and emergency surcharges on maritime cargo. During the recent Red Sea crisis, freight rates surged by nearly 90-100%, placing immense pressure on exporters, particularly micro, small, and medium enterprises (MSMEs) with limited financial resources. The government aims to alleviate these pressures and ensure that Indian exporters can maintain their market presence in these critical regions.
Components of the RELIEF Scheme
The RELIEF scheme comprises three key components designed to provide targeted support to exporters. The first component offers automatic extensions of export obligations for Advance Authorisations and EPCG authorisations due between March 1 and May 31, 2026, extending the deadline to August 31, 2026, without penalties. This component also protects insured shipments during a critical one-month window. The second component focuses on upcoming export consignments from March 16 to June 15, 2026, providing enhanced insurance coverage of up to 95% for fresh shipments into affected regions. The third and largest component specifically targets MSME exporters lacking ECGC coverage, offering partial reimbursement for extraordinary freight and insurance costs incurred during a one-month period. This component has the highest allocation of ₹282 crore, reflecting the government’s commitment to supporting smaller exporters.
Strategic Goals of the Support Package
Commerce Secretary Rajesh Agarwal highlighted that the RELIEF package is not merely a form of relief but a strategic initiative aimed at preserving India’s export market share during the crisis. He noted the dependence of certain countries on Indian exports and emphasized the government’s efforts to support exporters in maintaining their operations despite the challenging circumstances. The ECGC will implement a real-time monitoring dashboard for claims processing and fund utilization, while an EPM Steering Committee will oversee the scheme and adjust allocations as needed. Overall, the RELIEF package signals the government’s anticipation of ongoing pressures on trade routes and logistics costs due to the Middle East conflict, with a primary goal of preventing shipment disruptions and ensuring that Indian exporters, particularly MSMEs, retain their competitive edge in this strategically important region.
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