The Modi government on Thursday rolled out a relief package aimed at exports to several Middle Eastern countries to stabilise shipments to the region, reduce insurance burden and prevent further order cancellations. Trade flows have been disrupted since the outbreak of the Iran war late last month and the Iranian blockade of the Strait of Hormuz.
Lav Agarwal, the Director General of Foreign Trade, announced the launch of the 'Resilience and Logistics Intervention for Export Facilitation (RELIEF)' scheme with an outlay of nearly Rs 500 crore under the Export Promotion Mission that will provide focused and time-bound intervention. The government-owned Export Credit Guarantee Corp will be the implementing agency.
The RELIEF scheme will have three components: Part 1 focused on already insured exporters, Part 2 on upcoming exports to the region and Part 3 on MSME exporters not insured by the ECGC, Agarwal said. The scheme focuses on mitigating the sharp rise in logistics costs and insurance premiums for shipments heading to the Gulf and West Asia.
The first component will have an estimated support of Rs 56 crore to aid exporters for consignments where lading bill was issued between Feb 14-March 15 and destined for countries like the UAE, Saudi Arabia, Kuwait, Qatar, Iran, Oman, Bahrain, Iraq, Israel and Yemen. This will keep premiums at pre-disruption level and use government support to top up compensation for war losses, the official said.
The second part of the scheme will have an outlay of Rs 159 crore for consignments where lading bill was issued between March 16-June 15. This will bring fresh exports into ECGC cover while keeping premium burden unchanged for exporters, Agarwal said. The ECGC may provide enhanced cover of up to 95% of loss.
The third component will have an estimated support of Rs 282 crore for non-ECGC-insured MSME exporters for consignments where lading bill was issued between Feb 14-March 15. Additional war risk premiums and conflict-related shipping charges linked to route disruption will be covered. The support will be capped at Rs 50 lakh per exporter based on the actual loss. A further reimbursement of up to 50% for additional freight and insurance burden will be available, the official said.
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