India announces freight subsidy for dairy product exports

A wider variety of dairy products from India will soon be available to consumers in the Gulf, thanks to a scheme soon to be notified by the Directorate General of Foreign Trade (DGFT) to extend air freight assistance to exporters.

“Dairy products, which were hitherto not covered under the scheme, will be eligible for assistance under the revised assistance programme,” the government announced. “The DGFT will shortly notify the procedure for availing of assistance under the revised scheme.”

Simultaneously, “specified agricultural products” from India, exported to markets in the Gulf will get enhanced financial support by way of freight assistance. Such products, which were already receiving some export finance will now get 50 per cent more freight support if the exports and sent abroad by sea.

However, if such agricultural exports are by air, they will be eligible for 100 per cent freight subsidy. The 100 per cent freight subsidy will be a boon for dairy products which are perishable by nature and need to be shipped by air.

The agricultural products, which are eligible for support both by air and sea will be specified by the DGFT.

The one-year scheme was originally announced by the government here in February 2019 to help exporters offset rising freight costs. It was later extended by one more year till the end of India’s fiscal year on 31st March this year.

The “Revised Transport and Marketing Assistance for Specified Agriculture Products Scheme” with enhanced rates will now be in operation till the end of March next year. Exporters here estimate that their shipping costs have increased by 300 per cent in the last one year, partly on account of disruptions caused by COVID-19.

“Enhanced assistance under the revised scheme is expected to help Indian exporters of agricultural and dairy products to meet rising freight and logistics costs,” the government said.