West Asia crisis: Govt launches Rs 497-cr scheme to give relief to affected exporters

What Happened

• The Government of India launched the Resilience and Logistics Intervention for Export Facilitation (RELIEF) scheme with a financial outlay of Rs 497 crore to support Indian exporters bearing the burden of the ongoing West Asia conflict.
• The scheme is implemented under the Export Promotion Mission (EPM), a six-year mission (FY2025-26 to FY2030-31) with a total outlay of Rs 25,060 crore, aimed at boosting India's exports with special focus on MSMEs.
• The West Asia crisis — centred on conflict-related disruption to the Strait of Hormuz and Gulf region logistics — has significantly raised freight costs, insurance premiums, and war-risk surcharges for Indian exporters shipping to Gulf Cooperation Council (GCC) countries, and has also disrupted supply chains for exporters dependent on Gulf-sourced inputs.
• An Inter-Ministerial Group (IMG) was set up alongside the scheme to monitor the export situation and coordinate sectoral response.
• The scheme provides for automatic extension of compliance deadlines for Advance Authorisation and EPCG scheme holders, removing a major penalty risk for exporters unable to meet obligations due to the disruption.

Static Topic Bridges

India's Export Vulnerability and the West Asia Connection

India's merchandise exports to the GCC region (Saudi Arabia, UAE, Kuwait, Qatar, Oman, Bahrain) alone account for a significant share of India's total exports — the GCC is India's largest regional trading partner. Key export categories affected by the West Asia crisis include: petroleum products (India re-exports refined crude), engineering goods, textiles, chemicals, pharmaceuticals, and agricultural commodities. At the same time, India's import vulnerability is acute: about 85% of India's crude oil imports and a large share of its LPG come through or from the Gulf region.

The three compounding effects on Indian exporters from the crisis are: (1) significantly higher freight rates (shipping lines charge war-risk premiums for Gulf routes); (2) higher insurance costs (marine insurance rates spike for war-affected zones); and (3) non-payment risk (buyers in conflict zones may be unable to honour payment obligations).

Export Promotion Mission and India's Export Strategy

The Export Promotion Mission (EPM) was launched in 2026 as a consolidating framework replacing or integrating earlier export promotion schemes. It is built on two pillars: Niryat Protsahan (financial enablers — trade finance, credit guarantees, interest subvention) and Niryat Disha (non-financial support — quality compliance, branding, trade fairs, logistics facilitation). The EPM is explicitly MSME-focused, reflecting the recognition that MSMEs contribute about 45% of India's merchandise exports but face disproportionate barriers in accessing export finance and managing trade risks.

The decision to channel the RELIEF scheme through the EPM rather than as a standalone measure reflects a deliberate policy choice: to embed crisis relief within a long-term export competitiveness architecture rather than treating it as a one-time bailout. The Inter-Ministerial Group on West Asia exports was set up to ensure coordination between the Ministry of Commerce, MNRE, Ministry of External Affairs, and financial sector regulators.

The Foreign Trade Policy and WTO Compatibility of Export Support Schemes

India's export support regime operates under the Foreign Trade Policy (FTP), administered by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce. The current FTP 2023-28 was notified on March 31, 2023. Key instruments include Advance Authorisation (duty-free import of raw materials against export obligation), EPCG (zero-customs duty import of capital goods against export obligation), RoDTEP (Remission of Duties and Taxes on Exported Products), and ECGC-backed credit insurance.

WTO disciplines — specifically the Agreement on Subsidies and Countervailing Measures (ASCM) and the Agreement on Agriculture (AoA) — place constraints on export subsidies. India has faced WTO disputes over some of its export support schemes. However, crisis-response measures like RELIEF — which reimburse additional costs arising from an extraordinary geopolitical event rather than subsidising the goods themselves — are typically structured to fit within permissible support categories or are time-limited so as not to trigger formal dispute proceedings.

Key Facts & Data

• Scheme full name: Resilience and Logistics Intervention for Export Facilitation (RELIEF)
• Financial outlay: Rs 497 crore, channelled through the Export Promotion Mission
• Implementing ministry: Ministry of Commerce and Industry (DGFT as implementing arm)
• GCC: India's largest regional trading partner; bilateral trade ~$162 billion (FY2024)
• West Asia-affected countries eligible for freight/insurance support: UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, Iran, Israel, Yemen
• Advance Authorisation and EPCG deadline extension: obligations due March 1 – May 31, 2026 extended to August 31, 2026 without penalty
• MSME exporters (Component III): up to 50% reimbursement of additional freight/insurance burden; cap of Rs 50 lakh per exporter
• Export Promotion Mission: total outlay Rs 25,060 crore for FY2025-26 to FY2030-31
• Inter-Ministerial Group: constituted to monitor West Asia export situation and coordinate response
• ECGC: government-owned export credit insurer under Ministry of Commerce; provides the insurance infrastructure for Components I and II