NEW DELHI : Indian small and medium exporters are facing payment delays and cash‑flow stress as war‑risk premiums and emergency surcharges drive freight rates sharply higher, the trade ministry said on Thursday.
Routes through conflict‑hit West Asia have seen a steep rise in freight and insurance bills, costs that exporters have limited ability to pass on, the ministry said.
Addressing a press conference on Thursday, Secretary in the Commerce Ministry Rajesh Agarwal said, “We are announcing a new scheme under the Export Promotion mission, especially focused upon exporters exposed to these 17-18 geographies which have been impacted by the conflict to assuage some of the challenges that our exporters are facing.”
The package under the RELIEF scheme, with ECGC (Export Credit Guarantee Corporation of India) as the implementing agency, includes automatic extension of export obligations, logistical support, and potential financial measures to manage shipping delays.
The RELIEF scheme mainly includes consignments destined for delivery or trans-shipment to the UAE, Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, Iraq, Iran, Israel, and Yemen.
Speaking during an inter-ministerial briefing on Wednesday, Special Secretary in the Shipping Ministry Rajesh Kumar Sinha, said, “The additional war risk premium is being imposed now. Under normal circumstances, it is very low around 0.01 per cent or 0.02 per cent.”
He added that the premium increases depending on the risk exposure of a vessel’s route, particularly when entering conflict zones.
“If a ship enters a war zone, is on a voyage through such an area, or enters any high-risk region, the war risk premium increases,” Sinha noted.
He further said that insurance companies assess and determine these premiums based on prevailing security threats in the region.
Amid uncertainty over energy supplies due to the ongoing West Asia conflict, Sinha also said that no congestion has been reported at any port across India, assuring that maritime operations and cargo movement remain smooth and under close monitoring.
Additional Secretary said the Visakhapatnam Port Authority has created approximately 2,250 square metres of additional storage space to handle any potential surge in cargo.
He cited Mundra Port as an example, where, against a total container handling capacity of around four lakh TEUs, current occupancy stands at approximately 25 per cent.
New Delhi launched a 4.97 billion rupees ($53.26 million) scheme to support insurance cover for shipments moving through the affected corridors to stabilise costs and prevent order cancellations, it added.
Source : Reuters
