RELIEF Scheme to Support Exporters Amid West Asia Logistics Disruptions

Context

In the face of Iran war and resulting blockage of Strait of Hormuz and resulting maritime logistics across the Gulf region, the Union Ministry of Commerce and Industry has launched a time-bound targeted intervention called RELIEF – Resilience & Logistics Intervention for Export Facilitation under the Export Promotion Mission (EPM). 

Need for Relief Scheme

The Iran War in the Gulf region has a widespread impact on the maritime shipping sector, leading to widespread impact on Indian exporters. Some of the major challenges to maritime shipping are:

• Chokepoint Status: Strait of Hormuz: 100% collapse in inbound transit; Red Sea: Traffic suppressed by 49% due to kinetic strikes.
• Route Diversions: Shift to Cape of Good Hope adding 3–7 weeks to transit; surge in “Dark Shipping” (AIS off).
• Freight & Costs: Sea freight: Up 200–300%; Bunker Fuel: Surged from $490 to $1,120/tonne; Air Freight: Spiked 400%.
• Insurance Crisis: War Risk coverage suspended by major insurers; premiums rose from 0.02% to >1.0% of hull value.
• Financial Levies: Emergency Surcharges: $1,800 (20′ dry) to $3,800 (Reefer); new War Risk Surcharges (WRS) applied.
• Stranded Ports & Congestion: JNPA/Kandla: 30,000+ TEUs stranded; Transshipment: 40–55% congestion in Colombo/Singapore hubs.
• Commodity Shocks: Energy: QatarEnergy force majeure on LNG; Agriculture: 400k tonnes of Basmati rice stranded.
• Supply Chain: Container Famine: Empty boxes trapped in Gulf ports; Fertilizer: Global “supply cliff” expected by May.
• Human Impact: Rising Seafarer Abandonment; crews refusing to enter “War Risk Areas” after vessel hits (ONE Majesty).

About RELIEF SCHEME

• • RELIEF stands for Resilience & Logistics Intervention for Export Facilitation under the Export Promotion Mission (EPM). 
  • Objective of RELIEF SCHEME: Time-bound and targeted intervention aimed at supporting Indian exporters affected by extraordinary freight escalation, heightened insurance premiums and war-related export risks arising from disruptions in the Gulf and wider West Asia maritime corridor. RELIEF reflects the Government’s commitment to respond swiftly to external disruptions affecting India’s trade flows.
  • Nodal Agency: ECGC (Formerly Export Credit Guarantee Corporation of India Ltd.), wholly owned by the Ministry of Commerce & Industry, Government of India.
  • Eligible Consignments for benefit under RELIEF Scheme: 
    • Consignments destined to countries in the Gulf region like UAE, Saudi Arabia, Kuwait, Israel, Qatar, Oman, Bahrain, Iraq, Iran and Yemen, meant for both delivery and trans-shipment. 
    • Covers both eligible past shipments and prospective exports, with a strong focus on MSME support.

• Budget: Financial outlay of Rs. 497 Crores under the Mission. ECGC will maintain a dashboard-based monitoring system to enable real-time tracking of claims and fund utilisation.

• Review of RELIEF Scheme: EPM Steering Committee to periodically review the operation in light of evolving geopolitical conditions and may recommend calibrated modification, continuation or withdrawal as necessary.
• Components of Relief Scheme: There are three complementary components under the RELIEF Scheme.

RELIEF intervention aims to mitigate immediate logistics disruptions and protect exporter confidence while safeguarding sector-linked employment and reinforcing India’s long-term competitiveness in global trade.

• Mitigate Disruption: Reduce the immediate financial impact of logistics and freight hikes.
• Protect Confidence: Prevent order cancellations and maintain exporter morale.
• Safeguard Jobs: Ensure stability in employment across export-linked sectors.
• Global Competitiveness: Reinforce India’s resilience and reliability in international markets.

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