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Why in the News?

The Government approved the RELIEF initiative to protect Indian exporters from surging freight and insurance costs caused by the West Asia crisis.

Key Features of the RELIEF Intervention

The RELIEF (Resilience & Logistics Intervention for Export Facilitation) initiative launched under the Export Promotion Mission (EPM) to support Indian exporters facing disruptions due to the geopolitical situation in West Asia.

The scheme is a whole-of-government initiative with a financial outlay of ₹497 Crores.

It is implemented by the Export Credit Guarantee Corporation of India (ECGC) Ltd. as the nodal agency. Its three core components are:

Component	Details	Target Group & Timeline
Component 1: Retrospective Protection	Offers up to 100% risk coverage, in addition to existing ECGC cover, for consignments shipped during the peak disruption period.	Timeline: February 14, 2026 – March 15, 2026.
Component 2: Prospective Confidence Building	Provides up to 95% enhanced risk coverage to ensure future export flows are not hindered by uncertainty.	Timeline: March 16, 2026 – June 15, 2026.
Component 3: Direct MSME Relief	A partial reimbursement mechanism (up to 50%, capped at ₹50 lakhs per exporter) for high freight and insurance charges.	Target: Micro, Small, and Medium Enterprise (MSME) exporters who are not insured by ECGC.

Why Did the Government Introduce the RELIEF Initiative?

Logistics & Cost Escalation

Recent escalations, including airstrikes on Kharg Island and the closure of the Strait of Hormuz, have forced vessel diversions and longer shipping routes. This has led to a near-doubling of freight costs and high "war-risk" insurance premiums.

Exporter Vulnerability

The crisis has caused operational uncertainty, with shipments frequently delayed or failing to reach destinations. Without support, Indian exporters—particularly MSMEs—face order cancellations and the risk of losing market share in the Gulf region.

Economic Safeguards

The scheme aims to protect exporter confidence and safeguard employment in export-linked sectors that are under immediate financial pressure.

Global Competitiveness

It reinforces India's reliability as a global trading partner by ensuring that trade flows continue despite regional instability.

Conclusion

The RELIEF (Resilience & Logistics Intervention for Export Facilitation) scheme is a ₹497-crore initiative launched to cushion MSME exporters against rising freight and insurance costs caused by the West Asia conflict.

Source: PIB

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Q. "The escalating geopolitical tensions in West Asia threaten to derail India's export momentum and macroeconomic stability." Analyse. 150 words

Frequently Asked Questions (FAQs)

RELIEF (Resilience & Logistics Intervention for Export Facilitation) is a targeted, time-bound government intervention under the Export Promotion Mission (EPM) with an outlay of Rs. 497 Crores. It is designed to protect Indian exporters from extraordinary freight hikes and insurance premiums caused by West Asia geopolitical tensions.

Component 3 of the scheme provides direct relief to MSMEs by offering a partial reimbursement (up to 50%, capped at Rs. 50 lakhs per exporter) for eligible, non-ECGC-insured MSMEs burdened by sudden freight and insurance surcharges.

Disruptions cause a severe working capital crunch for exporters, fuel imported inflation due to elevated inward freight costs for raw materials, threaten jobs in labor-intensive sectors like textiles and agriculture, and reduce the refining margins of Indian petroleum exports.