India Assures Exporters of Support Amid West Asia Conflict

The government has assured exporters that it is ready to facilitate trade operations in view of the conflict in West Asia by providing flexibility in procedures for export authorisation and intervene on their behalf with financial and insurance institutions to support exporters’ interests. In a meeting with stakeholder ministries, key logistics and trade facilitation partners to review the emerging geo-political situation and its potential impact on India’s export-import cargo flows, the commerce ministry has also offered to coordinate with customs authorities to ensure smooth clearance for cargo evacuation. Smooth cargo evacuation would avoid congestion and extended dwell times particularly of time-sensitive export segments such as perishables, pharmaceuticals , and high-value manufactured exports. The meeting called by the Ministry of Commerce and Industry was also attended by representatives from logistics operators and shipping lines/forwarders, Central Board of Indirect Taxes and Customs, Department of Financial Services, Ministry of Petroleum and Natural Gas, Ministry of Ports, Shipping and Waterways, the Reserve Bank of India, export promotion ecosystem and other concerned agencies. Following the US-Israel strikes on Iran, the Strait of Hormuz—through which 20% of the world’s oil transits—has seen a 70% drop in vessel traffic, according to reports. Approximately 170 container ships and 150 oil tankers are currently anchored or “trapped” inside the Persian Gulf or its immediate approaches, unable to exit safely. Major shipping giants—including Maersk, MSC, Hapag-Lloyd, and CMA CGM—have officially suspended all transits through the Strait until further notice. War risk premiums for ships going through West Asian routes have gone up by 25-50%. The shipping companies have also put a war risk surcharge of $ 1,500 to $ 2,000 per 20 feet container to their charges, according to reports. With the war expanding to other countries , exporters are still awaiting updates on their cargoes at sea. They say it would take a few more days for clarity to emerge on the status of their shipments and new charges that they will have to bear. As an immediate support measure, the exporters have asked for restoration of rates of tax refund under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. Just last week the rate of refund was slashed by 50% to 0.15% to 2.15% from 0.3% to 4.3% of the value of exported products. They also sought that the insurance premiums under the Export Credit Guarantee scheme should not be raised despite the conflict. The scheme provides insurance cover to exporters against the risk of non-realization of export proceeds due to commercial or political risks. It also sought the ECGC cover to more products, The Apparel Export Promotion Council has also written to the Ministry of Civil Aviation to waive demurrage charges (fee for occupying terminal space beyond a set period) on export cargo due to flight disruptions. The gems and jewellery exporters have asked for an increase in time period for the sector for activities like shipments, diamond certification and return of jewellery from exhibitions The Department reaffirmed that it will continue to engage closely with all stakeholders and relevant Ministries to ensure that India’s trade continues to move efficiently and that any emerging issues are addressed in a timely manner, a statement said here.