India extends export risk relief to March 2027 as Gulf war-risk costs stay high

India has extended its government-backed export insurance scheme for West Asia shipments until March 31, 2027. The programme, known as RELIEF, or Resilience and Logistics Intervention for Export Facilitation, has been extended several times since it launched in March 2026. It is administered by ECGC Ltd under the Export Promotion Mission.

For brokers with Indian exporter clients shipping to the Gulf, the scheme’s structure is worth knowing in detail. The largest share of its budget is reserved for smaller exporters who had no commercial cover in place when the crisis began.

How it is structured

RELIEF was approved on March 19, 2026, in response to surges in freight and war-risk premiums after the conflict around the Strait of Hormuz escalated. The Ministry of Commerce and Industry’s press release cited “heightened insurance premia and war-related export risks arising from disruptions in the Gulf and wider West Asia maritime corridor” as the basis for the scheme.

It covers shipments destined for the UAE, Saudi Arabia, Kuwait, Israel, Qatar, Oman, Bahrain, Iraq, Iran and Yemen, for delivery or transshipment. Three components target different parts of the exporter base.

Component I provided up to 100% risk cover above standard ECGC terms for shipments dispatched between February 14 and March 15, 2026.

Component II, the part now extended to March 2027, provides up to 95% credit risk cover for qualifying new shipments, above ECGC’s standard cover level of 80% to 90%. The government absorbs the additional premium cost and reimburses ECGC directly for claims beyond its usual policy limits.

Component III targets MSME exporters who held no ECGC insurance during the disruption period. They can claim reimbursement of up to 50% of eligible additional freight and insurance costs, capped at ₹50 lakh per exporter.

Of the scheme’s total ₹497 crore allocation, ₹282 crore is ring-fenced for Component III, the largest single portion, according to Maritime Gateway. ECGC maintains a real-time dashboard to track claims and fund utilisation.

Cover available, but at a price

The conditions that created the scheme have not eased. War-risk premiums for vessels transiting the Strait of Hormuz have risen to between 7.5% and 10% of hull value, according to S&P Global data reported by Al Jazeera. The freight rate for crude oil shipped from the Gulf to China is running at roughly four times the five-year average of US$18.91 per metric tonne.

Simone Krummaker, associate professor of insurance at Bayes Business School in London, told Al Jazeera that cover is available but rarely on standard terms.

“Cover generally remains available for many voyages through Hormuz and Bab al-Mandeb, but often on restrictive terms and at prices that can materially change the economics of a voyage. Insurance is therefore coming in as a commercial constraint,” Krummaker said.

The contract shift

Some exporter associations have moved to reduce their exposure rather than seek more cover. The Indian Rice Exporters Federation has advised members to move away from CIF contracts for Gulf destinations and trade on FOB terms instead, according to BigMint. Under FOB, the buyer arranges insurance for the main voyage.

That reduces the exporter’s direct insurance need, but it does not remove the underlying risk. If the buyer’s cover fails or proves inadequate, the exporter can still be exposed, particularly where payment depends on safe arrival. Contingency or seller’s interest cover, which protects the exporter in that situation, is a placement opportunity for brokers rather than simply lost business.

What to check with clients

For brokers, the immediate step is to establish which clients could benefit. Exporters shipping new consignments to Gulf markets may qualify for enhanced cover under Component II through to March 2027. MSME clients who shipped without ECGC cover during the disruption period should check with ECGC whether they can still claim under Component III, and by when.