RELIEF Scheme – Resilience & Logistics Intervention for Export Facilitation

Agency: Ministry of Commerce & Industry (MoCI) Budget: Rs 497 crore

Key Features

  • Objective: Offer credit‑insurance cover at pre‑conflict premium rates to Indian exporters facing maritime risks due to the West Asia crisis.
  • Target Beneficiaries:
  • Existing exporters with ECGC cover (14 Feb – 15 Mar 2026) – up to 100 % loss cover for war‑related risks.
  • New exporters (excluding energy) (16 Mar – 15 Jun 2026) – up to 95 % loss cover.
  • MSME exporters without prior insurance – Rs 50 lakh cap per exporter.
  • Geographic Coverage: UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, Iran, Israel, Yemen.
  • Implementation Mechanism: Leveraging the Export Credit Guarantee Corporation (ECGC) to issue the enhanced cover.

Significance

  • Export Promotion: Shields Indian export earnings, especially from MSMEs, against war‑related disruptions.
  • Risk Management: Maintains confidence in trade routes through the Gulf and Red Sea, crucial for India’s oil and commodity imports.
  • Fiscal Prudence: Uses a targeted fund rather than broad subsidies, aligning with the government's fiscal consolidation agenda.

Protection & Indemnity (P&I) Club Initiative

Concept: P&I clubs are mutual, non‑profit bodies formed by shipowners to insure third‑party liabilities such as crew injury, pollution, cargo damage, collisions, and legal claims.

Global Context

  • The International Group of P&I Clubs covers ~90 % of the world’s ocean‑going fleet.
  • India currently relies on foreign P&I clubs; a domestic club would reduce dependence and potentially lower premiums.

Rationale for a Domestic Club

  • Geopolitical Risks: Escalating tensions in the Strait of Hormuz increase exposure to piracy, sanctions, and war‑related incidents.
  • Policy Autonomy: Enables India to tailor coverage, claim settlement, and risk‑sharing mechanisms to national interests.
  • Strategic Shipping: Supports the ‘Maritime India Vision 2030’ and aligns with the National Maritime Policy 2017.

Potential Benefits

  • Cost Efficiency: Pooling domestic shipowners’ risks may lead to lower insurance costs.
  • Regulatory Oversight: Greater control by the Ministry of Shipping and DG Shipping.
  • Capacity Building: Development of indigenous expertise in maritime risk assessment.

Broader Implications

  • International Relations: Demonstrates India’s proactive stance in safeguarding trade amid Middle‑East volatility, reinforcing its role as a reliable trading partner.
  • Economic Security: Protects supply‑chain continuity for critical commodities and supports MSME sector resilience.
  • Legal Framework: Aligns with the Marine Insurance Act, 1963 and the Insurance Regulatory and Development Authority (IRDA) guidelines for mutual insurance entities.

Related Constitutional/Legal Provisions

  • Article 301‑307 of the Indian Constitution – Freedom to trade and commerce throughout India.
  • Export Promotion Capital Goods (EPCG) Scheme – Complementary export incentive framework.
  • Maritime India Vision 2030 – Policy document emphasizing safe, secure, and sustainable shipping.

References

  • Geoeconomic Fallout of the US‑Israel‑Iran Conflict on India (link provided in article).