“The idea of “TIES” is to address those gaps in infrastructure which are not addressed by any other Government Scheme.”
Introduction:
Union Minister of State for Commerce and Industry Nirmala Sitharaman, on March 15, 2016 launched a new Central Government Scheme “Trade Infrastructure for Export Scheme” (TIES) – (Hereinafter referred to as the new scheme). The new scheme was launched for developing export linked infrastructure by way of providing assistance for setting up and upgradation of infrastructure projects with export linkages.
Requirements of the New Scheme:
The prime requirement of the new scheme is to enhance export competitiveness. Various state governments have been requesting for the support of the Central Government to create export infrastructure.
Objectives of the New Scheme:
- The intention of the Union Government is to plug gaps in trade infrastructure in the states and facilitate forward and backward linkages to units engaged in trade activities to promote outbound shipments.
- The new scheme aims to focus on and accord preference to projects of infrastructure requirements like integrated check posts, customs’ check points, border haats, trade promotion centres, dry ports, export warehousing and packaging, last mile connectivity besides establishing quality testing and certification labs, and Special Economic Zones (SEZs), etc. Overall, the point of focus would be on addressing the needs and various challenges and export bottlenecks being faced by the exporters.
- The new scheme would also undertake maintenance operations for completed projects.
- According to Nirmala Sitharaman the development of export linked infrastructure in the states is going to be on participative basis.
- The focus is not just to create infrastructure and leave it, but to ensure that the infrastructure developed is professionally run and sustained.
Budgetary Allocation and Tenure of the New Scheme:
The new scheme, to be implemented from April 1, 2017 till 31st March, 2020 and would have a budgetary allocation of Rs 600 crore in toto for three financial years with an annual outlay of Rs 200 crore. During the last fiscal year of 2019-20, 5% of the grant approved under the aggregate budgetary allocations under this new scheme would be used for appraisal, review, and monitoring.
Cost Sharing:
Previously, until 2015, the export assistance was provided to the states under the Development of Export Infrastructure and Allied Activities (ASIDE) Scheme funded by the Centre. Under the new scheme the cost of projects would be shared by the Centre and the states in 50:50 ratios. However, for the north-eastern and Himalayan region states, the Centre will bear up to 80 per cent of the costs involved.
Committee under the New Scheme:
- An Inter-Ministerial Empowered Committee is being set up for sanctioning, funding, overseeing and monitoring of the projects to be developed under the new scheme.
- This Committee would be headed by the Commerce Secretary.
- This Committee would have a total of 10 members.
- The other members of this Committee would comprise of the officials from some other ministries including senior members from The Directorate General of foreign Trade (DGFT), Department of Industrial Policy & Promotion (DIPP), National Institution for Transforming India (NITI Aayog) Ministry of Home Affairs and Ministry of Development of North-East Region.
- The Committee would assign the project overseeing and monitoring role to a professional agency at the national and/or regional levels.
Eligibility under the New Scheme:
- The central and state agencies, including export promotion councils, commodities boards, SEZ authorities and apex trade bodies recognized under the EXIM policy are eligible for financial support under this scheme.
- Under the new scheme only those projects which can establish a direct link for boosting the exports would be financed.
- However, for individual projects, the maximum limit of the financial aid from the new scheme has been fixed at Rs.20 Crores.
- Other financers of the projects may be considered by the committee during the process of approval.
Implementation of the New Scheme:
- Commerce Ministry is consulting various stakeholders for defining in a clear cut manner the linkage to be provided to the export units for the projects. Commerce Secretary Rita Teaotia stated that the exporters normally incur a large amount of expenditure on account of the absence of dedicated infrastructure, whether it is meant for testing labs and certification centres or cargo handling facilities or cold storage facilities at the ports and the development of such facilities would be undertaken under the new scheme for which a pay-and-use mechanism would be deployed.
- The new scheme would ease the burden of traders of traders who bear huge unnecessary costs on account of lack of necessary infrastructure.
- The facilities thus developed under the scheme would ensure smoother movement of export cargo as well as quality standards and certification.
Response of the States:
Rajasthan and Karnataka, the two states have already proposed projects under the new scheme.
Response of Export Organizations:
As per the press statement issued by S.C. Ralhan, the President of the Federation of Indian Export Organizations (FIEO) – the new scheme would go a long way in creating modern infrastructure as well as cutting down transaction and logistics costs and boosting exports.
