India Launches Rs 497 Crore RELIEF Scheme to Support Exporters Amid Middle East Conflict
The Indian government on Thursday unveiled the RELIEF (Resilience & Logistics Intervention for Export Facilitation) scheme, allocating Rs 497 crore to assist exporters grappling with disruptions caused by the ongoing conflict in the Middle East. This initiative aims to mitigate the impact of escalating freight costs, increased insurance premiums, and shipping delays, as the government seeks to cushion the blow to India's export sector.
Scheme Details and Implementation
Introduced under the Export Promotion Mission, the RELIEF scheme will be executed by the Export Credit Guarantee Corporation of India (ECGC). Commerce Secretary Rajesh Agarwal emphasized that the package is specifically designed to aid exporters exposed to conflict-affected markets in the region. According to PTI, he stated, "We are announcing a new scheme under the Export Promotion mission, especially focused upon exporters exposed to these 17-18 geographies which have been impacted by the conflict to assuage some of the challenges that our exporters are facing."
Daily Monitoring and Inter-Ministerial Coordination
To address trade disruptions, the government has established an inter-ministerial group (IMG) that includes representatives from the commerce ministry, ministry of petroleum and natural gas, ports and shipping, department of financial services, ministry of external affairs, RBI, CBIC, and other departments. This group meets daily to monitor the situation, assess cargo movement, and determine if further interventions are necessary. Commerce Secretary Agarwal noted that the Middle East conflict has significantly impacted trade, leading to substantial challenges for exporters.
Targeted Export Corridors and Urgency
The RELIEF scheme primarily covers consignments destined for or trans-shipped to key Gulf and Middle East destinations, including the UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, Iran, Israel, and Yemen. The urgency behind the scheme stems from disruptions around the Strait of Hormuz, which have triggered additional war-risk premiums and emergency conflict surcharges on maritime cargo. Freight rates on key routes surged by nearly 90-100% during the 2023-24 Red Sea crisis, and similar pressures are now heavily affecting exporters, particularly MSMEs with limited working capital.
Components of the RELIEF Scheme
Component I: Automatic Export Obligation Relief
The first component offers automatic extension of export obligations for Advance Authorisations and EPCG authorisations due between March 1 and May 31, 2026, with the deadline extended to August 31, 2026, without penalty. It also protects already insured shipments covered by ECGC from February 14 to March 15, 2026, providing top-up compensation for war and political risk losses beyond normal policy cover while maintaining pre-disruption premiums. Estimated support under this component is Rs 56 crore.
Component II: Enhanced ECGC Cover for Upcoming Exports
The second component targets upcoming export consignments from March 16 to June 15, 2026, aiming to encourage ECGC coverage. It provides stable premiums and enhanced insurance cover of up to 95% for fresh shipments to the affected region, with an estimated support of Rs 159 crore.
Component III: MSME Support for Freight and Insurance Shock
The third and largest component specifically aids MSME exporters without ECGC cover. It reimburses up to 50% of extraordinary freight and insurance costs incurred from February 14 to March 15, 2026, shielding smaller exporters from sudden surcharge shocks. This segment has the biggest allocation, with an estimated outlay of Rs 282 crore.
Strategic Goals and Oversight
Commerce Secretary Agarwal highlighted that the support package is not merely relief but a strategic move to preserve India's position in key overseas markets during the crisis. He stated, "There is a dependence on our exports in these countries, and we are trying to see that even in these difficult circumstances, whatever exports we are able to do, we are trying to support that also." ECGC will maintain a real-time monitoring dashboard for claims processing and fund utilization, while an EPM Steering Committee will oversee the scheme and reallocate funds as needed based on evolving conditions.
Overall, the RELIEF package signals the government's expectation that the Middle East conflict will continue to pressure trade routes and logistics costs in the near term. The immediate objectives are to prevent shipment disruptions, avoid order cancellations, and ensure Indian exporters, especially MSMEs, do not lose market share in this strategically vital region.
