The government Tuesday introduced a scheme for providing financial assistance for transport and marketing of agriculture products with a view to boosting export of farm commodities to certain countries in Europe and North America.
Under the Transport and Marketing Assistance (TMA) scheme, the government would reimburse a certain portion of freight charges and provide assistance for marketing of agricultural produce.
The scheme covers freight and marketing assistance for export by air as well as by sea (both normal and refrigerated cargo).
"Assistance under TMA would be provided in cash through direct bank transfer as part reimbursement of freight paid. FOB (freight on board) supplies where no freight is paid by Indian exporters are not covered under this scheme," the commerce ministry said in a statement.
The scheme would be applicable for a period as specified from time to time. Presently, it would be available for exports effected from March 1 this year to March 2020.
The level of financial assistance would be different for different regions and shall be admissible for exports made through EDI (electronic data interchange) ports only.
The assistance shall be admissible only if payments for the exports are received in free foreign exchange through normal banking channels.
It said that for export of products by sea, TMA will be based on the freight paid for a full Twenty-feet Equivalent Unit (TEU) containers.
However, the assistance will not be available for Less than Container Load (LCL) and a container having both eligible and ineligible category of cargo.
Further, no TMA is available where the cargo is shipped in bulk/break bulk mode. A forty feet container will be treated as two TEUs.
Similarly, assistance for products exported by air would be based on per ton freight charges on the net weight of the export cargo, calculated on the full ton basis.
The ministry said that the scheme aims to provide support for the international component of freight and marketing of agricultural produce which is likely to mitigate the disadvantage of the higher cost of transportation of export of specified agriculture products.
The ministry will lay down the procedure for scrutiny of the claims, the audit of the payments made, recovery of the ineligible/excess paid assistance, interest on such recoveries, it said.
The defaulters would be liable for penal action under the provisions of Foreign Trade (Development & Regulation) Act, 1992 and rules.
Hailing the scheme trade experts said that the decision would help in promoting farm exports from India.
"It is a good initiative by the commerce ministry. Agri exporters need such support to boost shipments," Assistant Prof and expert on agriculture economics Chirala Shankar Rao said.
Sharing similar views, Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta said that India has huge potential to boost agriculture exports and this scheme will help in exploring that potential.
As per the ministry, the highest reimbursement of Rs 31,500 per tonne will be provided for refrigerated shipments to South America, followed by Rs 28,700 for North America and Rs 24,500 to Oceania which includes Australia and New Zealand through sea route.
For normal containers also, the highest reimbursement of Rs 23,800 per ton will be provided for exports to South America, followed by Rs 21,000 for North America and Rs 16,800 to Oceania which includes Australia and New Zealand through sea route.
Similarly, Rs 3,500 per ton of freight reimbursement will be provided for exports through air route to South American countries and Rs 2,800 to North America and Oceania.
The other regions which are covered under this scheme include the European Union, Gulf region, ASEAN nations, Russia and CIS countries.
Products which will not avail these benefits include cane or beet sugar and raw sugar, molasses, gums, resins, butter and other fats, live animals meat, -milk and cream, beverages, spirits and vinegar and tobacco and manufactured tobacco substitutes.
Last year, the government approved an agriculture export policy with an aim to double the shipments to USD 60 billion by 2022. It is aimed at boosting exports of agriculture commodities such as tea, coffee and rice and increase the country's share in global agri-trade.