RELIEF Scheme: Govt's ₹497 Cr Package for Exporters

Introduction to the RELIEF Scheme

The Government of India has launched the Resilience & Logistics Intervention for Export Facilitation (RELIEF) scheme, a targeted support package with a financial outlay of ₹497 crore. Announced on Thursday, the initiative aims to cushion Indian exporters from the adverse effects of the ongoing conflict in West Asia. The scheme, introduced under the Export Promotion Mission, is designed to address the sharp increase in freight costs, insurance premiums, and shipping delays that have disrupted trade flows to the Gulf and Middle East regions. The Export Credit Guarantee Corporation of India (ECGC) has been appointed as the nodal agency for its implementation.

Context: Rising Geopolitical Tensions

The urgency for the RELIEF scheme stems from significant disruptions in key maritime corridors, particularly around the Strait of Hormuz. Escalating geopolitical tensions have led to vessel diversions, longer shipping routes, and congestion at major transshipment hubs. Consequently, shipping lines have imposed additional war-risk premiums and emergency conflict surcharges. These developments have caused freight rates on critical routes to surge, with some reports indicating increases of 90-100% during similar recent crises. This has placed immense pressure on exporters, especially Micro, Small, and Medium Enterprises (MSMEs) operating with limited working capital. Commerce Secretary Rajesh Agarwal acknowledged a "sense of worry among exporters" and stated the package is focused on helping those exposed to the 17-18 geographies impacted by the conflict.

Government's Coordinated Response

To manage the evolving situation, the government has established a high-level inter-ministerial group (IMG). This group comprises representatives from the Ministry of Commerce, Ministry of Petroleum and Natural Gas, Ministry of Ports and Shipping, Department of Financial Services, Ministry of External Affairs, the Reserve Bank of India (RBI), and the Central Board of Indirect Taxes and Customs (CBIC). The IMG meets daily to assess cargo movement, identify challenges, and determine the need for further interventions. This proactive approach ensures that the government can listen to exporters' concerns and respond swiftly to logistical and financial challenges as they arise.

A Three-Pronged Support Structure

The RELIEF scheme is structured into three distinct components to provide comprehensive support to different segments of the exporting community.

Component I: Support for Existing Shipments

With an allocation of ₹56 crore, the first component targets exporters with existing ECGC insurance cover for shipments dispatched between February 14 and March 15, 2026. It provides a top-up on compensation for losses due to war and political risks, ensuring up to 100% coverage without any increase in premiums. Additionally, this component offers an automatic extension of export obligations for Advance Authorisations and EPCG authorisations that are due between March 1 and May 31, 2026. The deadline for these obligations has been extended to August 31, 2026, without penalty, providing immediate operational relief.

Component II: Enhanced Cover for Future Exports

The second component, with an outlay of ₹159 crore, is designed to encourage and facilitate ECGC coverage for upcoming export consignments. It applies to fresh shipments planned for the three-month period from March 16 to June 15, 2026. Under this provision, exporters can avail enhanced insurance cover of up to 95% for shipments to the affected regions, with premiums maintained at pre-disruption levels. This measure aims to stabilize export flows by mitigating risks associated with future orders.

Component III: Targeted Aid for MSMEs

The largest part of the package, with an allocation of ₹282 crore, specifically supports MSME exporters who do not have ECGC cover. This component offers partial reimbursement for the extraordinary freight and insurance costs incurred on shipments between February 14 and March 15, 2026. Eligible MSMEs can receive reimbursement of up to 50% of the additional costs, subject to a ceiling of ₹50 lakh per exporter. This is a critical buffer for smaller businesses that are most vulnerable to sudden financial shocks from logistical disruptions.

RELIEF Scheme Component Overview

Strategic Goals and Market Protection

The Commerce Secretary emphasized that the RELIEF package is a strategic intervention to preserve India's market share in key overseas markets. The scheme is intended to prevent order cancellations, protect employment in export-oriented sectors, and ensure the continuity of supply chains. The targeted regions, including the UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, Iran, Israel, and Yemen, are strategically important for Indian trade. In the 2024-25 fiscal year, India's exports to West Asia stood at a significant $18.8 billion. By mitigating the immediate financial impact on exporters, the government aims to maintain their confidence and operational capacity during this period of uncertainty.

Implementation and Monitoring

The ECGC will manage the scheme's implementation, including claim verification, disbursement, and fund utilization, through a real-time monitoring dashboard. The Export Promotion Mission Steering Committee will oversee the scheme's progress and has the authority to reallocate funds or recommend changes based on how the geopolitical situation evolves. This flexible framework allows the government to adapt its support measures as needed, ensuring the scheme remains effective.

Conclusion

The ₹497 crore RELIEF scheme is a timely and comprehensive measure by the Indian government to support its export community through a period of significant geopolitical and logistical challenges. By providing targeted financial relief, enhanced insurance coverage, and operational flexibility, the initiative aims to safeguard exporters, particularly MSMEs, from the immediate shocks of the West Asia conflict. The ultimate goal is to ensure that Indian exports remain resilient and that the country maintains its strategic foothold in vital global markets.