Union Commerce Secretary Rajesh Agrawal said the government will roll out a ₹497-crore relief package for exporters affected by the US–Israel war on Iran. He added that authorities will coordinate with port officials in Gulf countries to implement the scheme smoothly.

The conflict has disrupted trade between India and Gulf nations. Port operations and shipping activities have slowed down or stopped in many areas.

Trade disruptions raise costs

At a joint press conference with Luv Agrawal, the commerce secretary said the government has set up an inter-ministerial group. This group is actively working to reduce the impact of the war on Indian businesses.

Meanwhile, DGFT Agrawal highlighted the rising pressure on exporters. He said logistics costs have increased sharply. MSMEs are facing delays in payments and financial stress. He also noted that insurance premiums and emergency surcharges have gone up significantly.

Support for freight and insurance costs

To ease the burden, the government will support exporters with insurance costs. Agrawal said small businesses will receive reimbursement of up to 50% for higher freight and insurance expenses.

He added that the package will also help Indian exporters meet their commitments to Gulf partners. It will ensure steady supply of essential goods, especially food items, to the region.

Three-step relief plan announced

The Ministry of Commerce has approved a package called ‘Resilience & Logistics Intervention for Export Facilitation’ (Relief) under the Export Promotion Mission.

The government has appointed ECGC Ltd as the nodal agency. It will handle verification, claims, payments, and monitoring.

Step 1: Full risk cover for insured exporters

First, exporters who already have ECGC insurance will receive up to 100% risk coverage. This will apply over and above their existing cover for shipments made between February 14 and March 15.

This step aims to provide stronger protection without adding extra costs.

Step 2: Encouraging new shipments

Next, exporters planning shipments between March 16 and June 15 will receive support to obtain ECGC cover. The government will help provide up to 95% risk coverage.

This move aims to maintain confidence and keep export flows steady despite uncertainties.

Step 3: Relief for MSMEs without insurance

Finally, the package will support MSME exporters who do not have ECGC insurance. These businesses will receive up to 50% reimbursement for increased freight and insurance costs.

The support will be subject to conditions and capped at ₹50 lakh per exporter.

Importance of Gulf trade for India

India’s trade with the Gulf Cooperation Council (GCC) forms about 15% of its total trade. In 2024–25, this trade reached around $178 billion. Imports stood at $121 billion, while exports were about $57 billion.

India exports engineering goods, textiles, gems and jewellery, and food products to the region. In return, it imports oil, gas, petrochemicals, and gold.

Additionally, nearly 9 million Indians work in Gulf countries. They send back around $51 billion every year as remittances.