The government on Thursday announced a Rs 497 crore scheme to enhance the insurance cover of exporters selling goods to West Asian countries directly impacted by the conflict in the region.
The Resilience and Logistics Intervention for Export Facilitation (RELIEF) will cover consignments for which the bill of lading was issued between February 14 and March 15, goods going out in the next three months and small and medium exporters who lacked insurance cover, Commerce Secretary Rajesh Agrawal told reporters.
RELIEF would work under the overall frame of Export Promotion Mission (EPM). a five-year, Rs 25,060 crore programme to boost exports. Shipments to the United Arab Emirates (UAE), Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, Iran, Israel and Yemen would be covered by relief.
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Tiered Insurance Cover
The war in West Asia has rendered the region’s largest ports unavailable for loading, unloading or transshipment. Even the key shipping routes passing through the region are not fully functional.
“Some amount of air cargo or exports are taking place and some amount of shipping movement is also on in the region through some ports in the periphery. Through Oman and other areas also some of these movements are there,” Agrawal said. “In these difficult times, we must ensure that food supply chains (to the region) remain active. We will also support the movement of key food items,” he added.
Emergency Measures
The Export Credit Guarantee Corporation (ECGC) covers non-payment after goods are accepted, resale or non-accepted goods, war risk impacting payments, payment delays and additional logistics costs if ships are diverted. The ECGC cover is usually 80% of the exporter’s loss; however, with RELIEF it would go up to 100% of the loss on goods already shipped or for which the bill of lading or airway bill was issued between February 14 and March 15. The government would bear the Rs 56 crore cost for the additional cover.
For exports going out from March 16 to June 15, 95% of the loss would be covered, instead of the 80% that ECGC currently covers. The additional coverage would not require exporters to pay extra premiums. This increased cover would fund this increased cover to the tune of Rs 159 crore.
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Exporters from Micro, Small, and Medium Enterprises (MSME) who did not have ECGC insurance cover but sent exports by sea between February 15 and March 14 would receive up to a maximum of Rs 50 lakh for losses suffered due to the conflict.
For non-ECGC-insured MSME exporters the government would spend Rs 282 crore. Their cover will include war risk surcharge, additional war risk premium, conflict related shipping charges, route disruption and additional insurance premium for cargo shipments.
“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,” Director General of Foreign Trade Lav Agarwal said.
TOPICSexportsInsurance Billinsurance premiumThis article was first uploaded on March nineteen, twenty twenty-six, at twenty-four minutes past six in the evening.