The Government of India has approved a time-bound support scheme called RELIEF (Resilience & Logistics Intervention for Export Facilitation) under its Export Promotion Mission to address exporters’ exposure to conflict-related disruptions in the Gulf and wider West Asia maritime corridor, with Export Credit Guarantee Corporation of India Ltd. (ECGC) designated as the nodal implementing agency.

RELIEF targets Gulf trade disruptions and insurance costs

RELIEF has been introduced amid heightened security concerns around the Strait of Hormuz, which have led to vessel diversions, longer sailing routes, congestion at transshipment hubs, and conflict-linked surcharges on freight and insurance. These conditions have pushed up logistics costs and added uncertainty for consignments bound for, or transshipping through, Gulf and West Asia ports. According to the government, the intervention is aimed at supporting exporters affected by “extraordinary freight escalation, heightened insurance premia, and war-related export risks arising from disruptions in the Gulf and wider West Asia maritime corridor.” The scheme is structured to apply both to shipments that moved during the initial disruption period and to exports planned over the months that follow. RELIEF covers consignments linked to markets including the United Arab Emirates, Saudi Arabia, Kuwait, Israel, Qatar, Oman, Bahrain, Iraq, Iran, and Yemen, whether as final destinations or via transshipment routes.

Inter-ministerial group coordinates logistics and risk measures

The approval of RELIEF follows the activation of an Inter-Ministerial Group (IMG) on Supply Chain Resilience on March 2, 2026, tasked with monitoring the evolving geopolitical situation and its impact on maritime flows through the Gulf region. The IMG began daily review meetings on March 3, bringing together central ministries and departments, financial institutions, logistics providers, and exporter associations.

Based on IMG discussions, authorities have put in place a set of operational measures, including procedural relaxations for the movement of stranded cargo, closer coordination at ports, waivers of storage and dwell-time charges for affected consignments, advisories on shipping line pricing practices, and increased monitoring of insurance risk conditions and inland logistics flows. Officials describe the process as involving multiple agencies working together to collect real-time information from the field and to shape a financial risk-mitigation mechanism that responds to conflict-linked trade and logistics issues.

ECGC to administer expanded export credit risk cover

Under the approved framework, ECGC – fully owned by the Government of India under the Ministry of Commerce and Industry – will verify applications, process claims, disburse support, and oversee utilisation. Its existing export credit risk portfolio spans commercial and political risks, including war-related contingencies, providing a base for administering the new measures. RELIEF consists of three complementary components. First, exporters that already hold ECGC credit insurance for eligible consignments will be eligible for up to 100% risk coverage, over and above existing ECGC cover, for shipments within the disruption window from Feb. 14 to March 15, 2026. This raises indemnity levels on insured exports to the affected corridor during that period. Second, exporters planning shipments between March 16 and June 15, 2026, will be encouraged to obtain ECGC cover, with government support enabling up to 95% risk coverage in addition to the standard protection for eligible consignments. The intent is to keep export activity to the region functioning while logistics and security conditions remain uncertain.

Third, recognising uneven insurance take-up among smaller firms, RELIEF offers a partial reimbursement mechanism for micro, small, and medium-sized exporters that did not hold ECGC credit insurance between Feb. 14 and March 15, 2026, but incurred higher freight and insurance surcharges linked to the conflict. Reimbursement can reach up to 50% of eligible incremental expenses, subject to defined conditions, documentary checks and a per-exporter ceiling of 5 million rupees.

Implementation under the Export Promotion Mission will proceed with an approved financial outlay of 4.97 billion rupees. ECGC will run a dashboard-based monitoring system to track claims and fund use in real time, while the mission’s steering committee will periodically review RELIEF in light of geopolitical developments and may recommend changes, extension, or withdrawal. The scheme increases the state’s share of conflict-related export risks linked to the West Asia corridor and may influence pricing, capacity deployment, and policy terms for shipments routed through the Strait of Hormuz.

EY flags macroeconomic impact from Middle East conflict

Alongside the trade-focused intervention, an EY Economy Watch report has outlined broader macroeconomic risks for India if the Middle East conflict persists through fiscal year 2026-27, with potential implications for inflation, growth and sector-specific exposures relevant to insurers. “If the impact persists throughout FY27, we estimate that India’s real GDP growth could erode by around 1 percentage points, while CPI inflation could rise by approximately 1.5 percentage points from their baseline estimates of 7% and 4%, respectively,” the report said, as reported by Economic Times.

EY’s February analysis had projected India’s GDP growth in FY27 in the 6.8% to 7.2% range. The Organisation for Economic Cooperation and Development recently forecast India’s growth to moderate to 6.1% in the next fiscal year from 7.6% in the current year. The EY report noted that sectors such as textiles, paints, chemicals, fertilizers, cement, and tires – many of which are employment-intensive – could be directly affected by higher energy and input costs, and that any reduction in employment or incomes in these areas “may further dampen aggregate demand.” It added that India, which imports nearly 90% of its crude oil and is highly dependent on natural gas and fertilizer imports, is “particularly vulnerable to such external shocks, with the adverse effects likely to cascade across multiple sectors through strong forward and backward linkages with crude oil and energy.” According to EY, the conflict has already disrupted global crude and energy markets by affecting “supply, storage, transportation, and prices,” and even if resolved quickly, some of these disruptions “may take considerable time to normalise.” Global crude prices have risen by almost 50% since the US and Israel launched military strikes against Iran on Feb. 28, triggering retaliation from Tehran.

Policy buffers and implications for insurance portfolios

In response to these risks, EY said the Government of India “may need to deploy a substantive countercyclical policy. It may also be prudent for the GoI to co-opt larger and more industrialised states into this countercyclical effort.” It pointed to the 1 trillion-rupee Economic Stabilization Fund (ESF), created in FY26, as a financial buffer that could be augmented to manage prolonged external shocks. The combination of RELIEF and the ESF outlines a policy setting in which the state carries part of the trade, credit, and macroeconomic risks associated with energy and shipping volatility. Insurers and reinsurers active in India-linked business are likely to continue reviewing war-risk language, exposure concentrations in the Gulf corridor, and the interaction between sovereign-backed schemes and private covers as conditions evolve.