The government has launched a new scheme — TIES — for developing export linked infrastructure in states with a view to promote outbound shipments.
Launched by Commerce and Industry Minister Nirmala Sitharaman, the Trade Infrastructure for Export Scheme (TIES) seeks to bridge the infrastructure gap and provide forward and backward linkages to units engaged in trade activities.
“It is going to be on participative basis and the focus is not just to create infrastructure and leave it, but make sure that it is professionally run and sustained,” Sitharaman told reporters here.
An inter-ministerial empowered committee for sanctioning and monitoring of the project was set up for the scheme. It will be headed by the commerce secretary.
“We are definitely asking for a clear definition and linkage with export industries (for the projects),” she added.
Commerce Secretary Rita Teaotia said some of the biggest cost, the exporters tend to incur is on account of absence of dedicated infrastructure, whether it is testing or handling facilities or cold storages at ports.
The TIES would focus on projects like customs checkpoints, last mile connectivity, border haats and integrated check posts.
“The idea of this scheme is to address those gaps in infrastructure which are not addressed by any other scheme. It will help to ensure smoother movement of export cargo and also ensure quality standards and certification,” Teaotia added.
The scheme, to be implemented from April 1, would have a budgetary allocation of Rs 600 crore for three years with an annual outlay of Rs 200 crore.
Five per cent of the grant approved would be used for appraisal, review and monitoring. It will be implemented from 2017-18 till 2019-20.
Unlike Assistance to States for Development of Export Infrastructure and Allied Activities (ASIDE) Scheme, which was funded by the Centre, the cost of projects under TIES would be equally shared between the Centre and the states.
However, for north—eastern and the Himalayan region states, the Centre may bear 80 per cent of the cost.
Under the scheme, priority would be given to the projects involving significant contribution by the implementing agency and bank financing for achieving financial closure.
The other salient features of the scheme includes promotion of leveraging of funds from other sources including bank financing; no recurring costs of the land to be included; and operating & maintenance costs to be met through pay and use charges.
The central and state agencies, including Export Promotion Councils, Commodities Boards, SEZ authorities and apex trade bodies recognised under the EXIM policy of government; are eligible for financial support under this scheme.
States are very receptive to this scheme as it will be utilised for their benefits, Sitharamn said, adding the contours of this scheme is different from ASIDE.
Two states — Rajasthan and Karantaka — have already submitted project proposals under this scheme.
After delinking of the ASIDE scheme in 2015, states have been consistently requesting the support of the Centre in creation of export infrastructure.
The Central government funding will be in the form of grant—in—aid, normally not more than the equity being put in by the implementing agency or 50 per cent of the total equity in the project.
In case of projects located in North—Eastern states and Himalayan states, including Jammu & Kashmir, this grant can be up to 80 per cent of the total equity.
The grant in aid shall, normally, be subject to a ceiling of Rs 20 crore for each infrastructure project.
The implementing agencies would provide details of the financing tie—ups for the projects, which will be considered before approval of the project. Disbursement of funds shall be done after financial closure is achieved.
Assistance would be provided for setting up and upgrading the infrastructure projects like border haats, land customs stations, trade promotion centres, setting up of dry ports, export warehousing, infrastructure in SEZs and ports/airports.
Projects which can be covered under sector specific schemes like leather, textiles, IT and electronics, and not related with exports will not be supported under TIES.
The commerce ministry will engage a professional agency for project monitoring on a pan India or regional basis.
Explaining the need for the scheme, the ministry in a statement said that there are infrastructural gaps related to export promotion like adequate testing and certification labs, cargo handling facilities and last mile connectivity.
It also said that the number of technical regulations and standards adopted by countries has grown significantly.
The 10—member committee comprises of commerce secretary, DGFT, NITI Aayog CEO, joint secretaries from DIPP, Home Affairs Ministry and Ministry of Development of North East Region.
