Trade Infrastructure for Export Scheme
Trade Infrastructure for Export Scheme (TIES) is a scheme launched by the Government of India in 2017 with the aim of creating and upgrading infrastructure facilities for boosting exports.
- TIES is a scheme to assist Central and State Government agencies in creating appropriate infrastructure for the growth of exports.
- Under the scheme, financial assistance is provided to Central/State Government owned agencies for setting up or up-grading export infrastructure in States/UTs.
- The states can avail of the scheme through their implementing agencies for infrastructure projects.
- This scheme includes Infrastructure like – Land customs stations, quality testing and certification labs, cold chains, trade promotion centres, export warehousing and packaging etc.
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The Trade Infrastructure for Export Scheme (TIES) was implemented by the Directorate General of Foreign Trade (DGFT) to address the infrastructure-related challenges faced by Indian exporters, which often act as a bottleneck in the supply chain and hinder the growth of exports. The scheme aims at achieving the following goals:
Boosting exports: The scheme aims to develop and upgrade infrastructure facilities that will help in enhancing competitiveness of Indian exports and increase their market share in the global market.
Reducing transaction costs: Inadequate infrastructure leads to higher transaction costs for exporters, such as higher transportation costs, longer turnaround times, and higher inventory carrying costs. By providing financial assistance for development of infrastructure facilities, TIES aims to reduce these costs for exporters.
Addressing capacity constraints: In some cases, existing infrastructure facilities are inadequate to meet the increasing demand for exports. TIES aims to address this by providing financial assistance for the development of new infrastructure facilities and the expansion of existing ones.
Improving quality standards: The scheme also provides financial assistance for the development of common facilities such as testing and certification labs, cold storage, warehouses, and packaging facilities. This will help in improving the quality standards of Indian exports and making them more competitive in the global market.
Components of TIES
- Infrastructure Development: Financial assistance is provided for setting up and upgrading infrastructure facilities such as ports, airports, inland container depots, border check posts, land customs stations, and other such facilities.
- Upgradation of Common Infrastructure: Financial assistance is also extended for the development of common facilities such as testing and certification labs, cold storage, warehouses, and packaging facilities.
- Special Economic Zones (SEZs): TIES provides financial assistance for developing infrastructure facilities in SEZs to enhance their competitiveness and promote exports from these zones.
- Grant for Accreditation: The scheme provides a grant for accreditation to laboratories and certification bodies for testing and certifying products for exports.
- Research and Development: It also provides financial assistance for research and development in areas related to exports, such as product development, process improvement, and market research.
The scheme will provide comprehensive support to Indian exporters by addressing infrastructure-related issues and enhancing their competitiveness in the global market.
Exclusions under the scheme:
- Projects which are covered under sector-specific schemes like textiles, STATES CELL electronics, and IT.
- General infrastructure projects like highways, power etc.
- Projects where an overwhelming export linkage cannot be established.
The following agencies shall be eligible for financial support under this scheme and will be known as ‘Implementing Agency’.
- Under this Scheme, financial support will be provided to eligible agencies known as ‘Implementing Agencies.’
- These agencies include Central Government Agencies such as Export Promotion Councils, Commodities Boards, SEZ Authorities, and Apex Trade Bodies recognized under the EXIM policy of the Indian Government.
- State Government Agencies and Joint Ventures where a government agency has a significant stakeholding are also eligible. PPP projects can also receive support.
The implementing agency must be responsible for the ownership, operation, and maintenance of the facility created under the scheme.
Extent of financial assistance
The Central Government will provide assistance for infrastructure development through grant-in-aid. The amount of this grant will not exceed the equity invested by the implementing agency or 50% of the total equity in the project. However, for projects located in North Eastern States, and Himalayan States including UT of J&K, Ladakh, this grant can be up to 80% of the total equity. Additionally, for states with poor export infrastructure and a lack of institutional capacity to prepare good Detailed Project Reports (DPRs) but have positive export potential, this grant can also be up to 80% of the total equity.
- Under the scheme, the grant-in-aid for infrastructure projects will usually be limited to INR 20 crore per project.
- The cost of land will not be considered in calculating the contribution of the implementing agency.
- Infrastructure projects that involve significant contributions from stakeholders and bank financing will be given priority. Public-Private Partnership (PPP) projects will be promoted in states with relatively better export infrastructure and institutional capacity, to ensure optimal utilization of funds under the TIES.
- The central government will not provide any recurring expenditure or establishment costs under the scheme.
- The empowered committee will determine the extent of grants for studies related to identifying sector-specific infrastructure gaps and mapping assets.
|Details of projects approved & fund released under TIES for major (FY 2019-20 to FY 2022-23)
|Name of State/UT
|Number of New projects approved
|TIES fund released (in Rs. crore)
Source: Department of Commerce, Government of India
Under TIES, financial assistance for a total of 40 export infrastructure projects has been approved from FY20 to FY23 and funds worth Rs 278 crore have been released.
Trade Infrastructure for Export Scheme (TIES) is a promising initiative by the government to enhance India’s export infrastructure. It emphasizes stakeholder participation and bank financing, as well as promoting Public-Private Partnership (PPP) projects, to encourage private investment in the country’s export infrastructure.