India approves Rs 497 crore RELIEF scheme to support exporters hit by Gulf conflict

The Indian government has introduced an incentive scheme, “Resilience & Logistics Intervention for Export Facilitation (RELIEF),” under the Export Promotion Mission, with an approved financial outlay of Rs 497 crore. The scheme is aimed at supporting exporters impacted by the sharp increase in freight costs due to the three-week-long Israel–US war with Iran, which has caused global logistics disruptions. Covering shipping and demurrage costs, the initiative is likely to benefit all categories of exporters, including micro, small and medium enterprises (MSMEs) as well as large firms, helping them navigate ongoing geopolitical uncertainties.

Implementation of RELIEF will be undertaken by the Export Credit Guarantee Corporation of India (ECGC), which will maintain a dashboard-based monitoring system to enable real-time tracking of claims and fund utilisation. The EPM Steering Committee will periodically review the operation of the intervention in light of evolving geopolitical conditions and may recommend calibrated modifications, continuation, or withdrawal as necessary. Shipments across West Asia were severely affected by the closure of the Strait of Hormuz, resulting in exorbitant logistics costs.

According to a statement from the Ministry of Commerce and Industry, “In view of the evolving geopolitical situation in West Asia and its impact on maritime logistics across the Gulf region, the government has approved a time-bound and targeted intervention called RELIEF—Resilience & Logistics Intervention for Export Facilitation—under the Export Promotion Mission (EPM), with a financial outlay of Rs 497 crore. Recent developments, including heightened security concerns around the Strait of Hormuz, have led to vessel diversions, longer sailing routes, congestion at trans-shipment hubs, and emergency conflict-linked surcharges.”

Welcoming the scheme, S. C. Ralhan, President of the Federation of Indian Export Organisations (FIEO), said, “The government’s timely and proactive announcement of the RELIEF (Resilience & Logistics Intervention for Export Facilitation) initiative under the Export Promotion Mission is aimed at supporting exporters impacted by ongoing disruptions in West Asia’s maritime trade routes. Recent developments around the Strait of Hormuz and the wider Gulf region have led to significant challenges, including vessel diversions, increased transit times, congestion at trans-shipment hubs, and steep increases in freight and insurance costs.”

Measures under RELIEF scheme
The RELIEF intervention comprises three complementary components covering consignments destined for countries in the region, such as the United Arab Emirates, Saudi Arabia, Kuwait, Israel, Qatar, Oman, Bahrain, Iraq, Iran, and Yemen, whether for delivery or trans-shipment.

First, exporters who have already obtained ECGC credit insurance cover for eligible consignments will benefit from up to 100 percent risk coverage, over and above the existing ECGC cover, during the eligible period (February 14, 2026, to March 15, 2026), thereby ensuring enhanced protection without any additional financial burden.

Second, exporters planning upcoming consignments over the next three months (March 16, 2026, to June 15, 2026) will be encouraged to obtain ECGC cover, with government support for up to 95 percent risk coverage over and above the existing ECGC cover. This will help sustain exporter confidence and facilitate continued shipment flows despite logistics uncertainties.

Third, recognising that some MSME exporters may not have availed credit insurance during the period from February 14, 2026, to March 15, 2026, but are facing extraordinary freight and insurance surcharge burdens, RELIEF includes a partial reimbursement mechanism (up to 50 percent) for eligible non-ECGC-insured MSME exporters. This support will be extended subject to prescribed conditions, documentary verification, and notified ceilings (up to Rs. 50 lakh per exporter), and is intended to provide timely relief against conflict-related logistics cost escalation.

Rationale
The Middle East conflicts have increased logistics costs and created operational uncertainty for export consignments moving to or through the region, particularly for Indian exporters with exposure to these markets. Therefore, the intervention is aimed at supporting Indian exporters affected by extraordinary freight escalation, heightened insurance premia, and war-related export risks arising from disruptions in the Gulf and the wider West Asia maritime corridor. The approval of RELIEF reflects the government’s commitment to responding swiftly to external disruptions affecting India’s trade flows.

As part of a coordinated, whole-of-government response to the crisis, an Inter-Ministerial Group (IMG) on Supply Chain Resilience was operationalised on March 2, 2026, to monitor the situation and coordinate facilitation measures. The IMG commenced daily review meetings from March 3, 2026, bringing together multiple ministries and departments, financial institutions, logistics stakeholders, and exporter associations.

Based on IMG deliberations, several operational measures were implemented, including procedural relaxations for the movement of stranded cargo, enhanced coordination at ports, waivers of storage and dwell-time charges for affected cargo, advisories to promote transparency in shipping line pricing, and strengthened monitoring of insurance risk developments and inland logistics movements. These coordinated efforts helped ensure real-time assessment of ground-level challenges and supported the design of a targeted financial risk-mitigation intervention.

RELIEF has been structured to provide support across the export cycle by covering shipments that had already departed during the disruption period, as well as prospective exports planned to the affected region.

Under the approved framework, ECGC Ltd. (formerly Export Credit Guarantee Corporation of India Ltd.), wholly owned by the Government of India (Ministry of Commerce & Industry), has been designated as the nodal and implementing agency responsible for verification, claim processing, disbursement, and monitoring. ECGC’s established experience in providing export credit risk cover against commercial and political risks, including war-related contingencies, is expected to ensure credible and timely delivery of assistance.

Mitigating immediate logistics disruptions
Through RELIEF, the government aims to mitigate the immediate impact of logistics disruptions, protect exporter confidence, prevent order cancellations, and safeguard employment in export-linked sectors. The intervention also reinforces India’s commitment to maintaining resilience and competitiveness in global trade during periods of uncertainty.

Key highlights of RELIEF under the Export Promotion Mission (EPM) include the following: The government has approved RELIEF—Resilience & Logistics Intervention for Export Facilitation—under the Export Promotion Mission. The intervention responds to logistics disruptions and cost escalation in the Gulf and the wider West Asia maritime corridor. ECGC will act as the nodal implementing agency for risk coverage and the reimbursement mechanism. RELIEF covers both eligible past shipments and prospective exports, with a strong focus on MSME support, and the intervention will be funded under the EPM and reviewed periodically based on evolving geopolitical developments.

Outlook
The provision of a dedicated financial outlay and a real-time monitoring mechanism is expected to ensure transparency and the timely disbursement of benefits. The RELIEF initiative is expected to go a long way in mitigating the immediate impact of logistics disruptions.

DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com