Resilience & Logistics Intervention for Export Facilitation (RELIEF) Scheme

Source: PIB

Summary

• Expansion: In April 2026, the Government expanded the RELIEF scheme to include Egypt and Jordan, in addition to the existing 10 Gulf and West Asian nations.
• Purpose: A financial and logistical buffer designed to protect Indian exporters from the extraordinary war-risk surcharges and freight hikes caused by regional conflicts.
• Financial Outlay: Allocated ₹497 Crore to be utilized through three distinct components targeting both insured and non-insured exporters.
• Nodal Agency: Managed by ECGC Limited (Export Credit Guarantee Corporation of India).
• Strategic Goal: To maintain India’s export momentum and protect MSME profit margins amidst maritime disruptions in chokepoints like the Strait of Hormuz and Suez Canal.

Background Concept

To understand the RELIEF scheme, it is important to grasp how global trade reacts to conflict and how the government intervenes to stabilize it.

1. Geopolitical Risks in Trade

When a region like West Asia experiences conflict, shipping companies face higher risks of cargo damage or vessel seizure. Consequently, they impose War Risk Surcharges. For an Indian MSME, these sudden costs can turn a profitable order into a loss, leading to “order cancellations.”

2. The Role of ECGC

The ECGC (Export Credit Guarantee Corporation) is a government-owned entity that provides export credit insurance. Normally, if a foreign buyer defaults or a country’s government collapses, the ECGC pays the exporter.

• The Challenge: During a war, insurance premiums usually skyrocket.
• The RELIEF Solution: The government steps in to “freeze” these premiums, essentially paying the difference so the exporter doesn’t have to.

3. Why Egypt and Jordan?

The expansion to Egypt and Jordan is strategic. Egypt controls the Suez Canal, and Jordan is a key land-link and trade partner. Including them ensures that the entire “logistics corridor” of the Red Sea and West Asia is covered under the safety net.

Key Components of the RELIEF Scheme

The scheme uses a tiered approach to ensure no exporter is left behind:

Component	Target Group	Benefit
Component I	Existing ECGC Policyholders	100% risk coverage; premiums frozen at pre-war rates.
Component II	New ECGC Policyholders	95% risk coverage for shipments starting after March 16, 2026.
Component III	Non-Insured MSMEs	50% reimbursement of surcharges (capped at ₹50 Lakh).

Significance for India’s Economy

• Safeguarding Employment: Export-linked sectors (like textiles and engineering) employ millions; by preventing order cancellations, the scheme protects these jobs.
• SME Competitiveness: Small businesses often lack the capital to absorb a 200% hike in freight. The 50% reimbursement acts as a critical survival tool.
• Maritime Security Alignment: This scheme works in tandem with the Indian Navy’s presence in the region to ensure that trade remains physically and financially secure.

Multiple Choice Questions (MCQs)

Q1. Which organization is the nodal agency for implementing the RELIEF scheme?

A) NITI Aayog

B) EXIM Bank

C) ECGC Limited

D) Directorate General of Foreign Trade (DGFT)

Q2. The RELIEF scheme was recently expanded to include which two countries?

A) UAE and Saudi Arabia

B) Egypt and Jordan

C) Israel and Iran

D) Oman and Qatar

Q3. Under Component III of the RELIEF scheme, what is the maximum reimbursement amount an individual MSME can claim for logistical surcharges?

A) ₹10 Lakh

B) ₹25 Lakh

C) ₹50 Lakh

D) ₹1 Crore

Q4. What is the primary purpose of the “War Risk Surcharge” that the RELIEF scheme aims to mitigate?

A) To tax exporters for participating in trade.

B) To cover the increased cost of insurance and safety in conflict zones.

C) To fund the construction of new warships.

D) To encourage domestic sales over exports.

Q5. The RELIEF scheme provides up to 100% risk coverage for which group of exporters?

A) New exporters who have never shipped goods.

B) Existing ECGC policyholders.

C) Only exporters dealing in petroleum products.

D) Exporters who do not use maritime routes.

Answers:

Q1: C | Q2: B | Q3: C | Q4: B | Q5: B