Logistics and trade infrastructure is an important aspect for any government as it facilitates the transportation of goods and other services from one country to another. An efficient infrastructure is crucial for a smooth and pleasant process. An efficient trade infrastructure helps the transportation process move faster and with fewer obstacles, which in turn benefits the end customer who receives a wider selection of goods at lower prices.

What Is Trade Infrastructure for Export Scheme (TIES)?

The Trade Infrastructure for Export Scheme (TIES), launched by the Indian government in 2017, aims to develop and improve infrastructure facilities to increase exports. Since 2015, when the ASIDE (Assistance to States for Development of Export Infrastructure and Allied Activities) scheme was de-linked from federal assistance, state governments have repeatedly requested the Center for assistance in creating export infrastructure.

Through their implementing agencies, the states can utilise this govt scheme to finance infrastructure projects that significantly contribute to exports. This includes border ports, land customs stations, quality testing and certification laboratories, cold chains, Trade Promotion Centres (TPCs), export storage and packing facilities in Special Economic Zones (SEZs), and cargo handling facilities at ports and airports.

This central government scheme will provide financial support in the form of grants to create infrastructure. Generally, this assistance will not exceed 50% of the equity capital contributed by a promoter to the project or the equity capital specified in the project budget. However, for projects in the North Eastern States and Himalayan States, including J&K, UT and Ladakh, this grant can go up to 80% of the total investment.

Goal Of Trade Infrastructure for Export Scheme (TIES)

The Trade Infrastructure for Export Scheme (TIES) has been introduced by the Directorate General of Foreign Trade (DGFT) to address the infrastructural challenges faced by Indian exporters. This government scheme aims to achieve the following objectives:

Increase exports -The scheme aims to create and improve infrastructure to increase the efficiency of Indian exports and increase their share in the international market.

Reduce transaction costs- Inadequate infrastructure leads to higher transaction costs for exporters, such as higher transportation costs, longer turnaround times and higher warehousing costs. By providing financial assistance for the construction of infrastructure facilities, TIES hopes to reduce exporters’ costs.

Capacity bottlenecks- In some cases, existing infrastructure facilities are not sufficient to meet the increasing demand for exports. TIES is trying to address this problem by providing financial assistance for the construction of new infrastructure facilities and the expansion of existing ones.

Quality standards -The scheme also provides financial assistance for setting up common facilities. This will help raise the quality standards for Indian exports and make them more competitive in the international market.

Eligibility & Provisions Of Trade Infrastructure for Export Scheme [TIES]

Entities eligible for financial support under this provision include commodity boards, SEZ authorities, trade organisations, state and federal government entities, or joint ventures between a government entity and a private company.

Under the scheme, the Central Government funds will be provided as grants to the selected institutions or companies. This grant cannot amount to more than 50% of the total equity contributed by the entity to the project.

However, for projects in Northeast India (Assam, Tripura, Meghalaya, Arunachal Pradesh, Nagaland, Manipur, Sikkim and Mizoram) and the Himalayan region (Jammu & Kashmir and Leh-Ladakh), there is a special scheme where the Centre promises to contribute up to 80% of the cost.

The grant for a single infrastructure project is limited to a maximum of Rs. 20 crore.

Conclusion

The Trade Infrastructure for Export Scheme (TIES) is an ambitious government initiative aimed at improving India’s export infrastructure. It focuses on stakeholder engagement, bank financing and public-private partnership projects to encourage private investment in India’s export infrastructure.

For more information and details of projects approved & funded under TIES, click here for the guidelines released by the Ministry of Commerce and Industry.