Context: Recently, the Minister of State in the Ministry of Commerce and Industry, Smt. Anupriya Patel, in reply to a parliamentary question, informed about various aspects of the Trade Infrastructure for Export Scheme (TIES).

Trade Infrastructure for Export Scheme (TIES)

• It is a Government of India initiative that aims to enhance the export competitiveness of India’s goods and services by developing and improving trade-related infrastructure and facilities

• Parent Ministry: TIES is a central sector scheme that was launched in 2017 by the Ministry of Commerce and Industry.

• Funding: Under TIES, the government provides financial assistance to state governments and central agencies for creating or upgrading infrastructure that is essential for promoting exports.

• Scope: The TIES scheme covers various aspects of trade-related infrastructure such as setting up new infrastructure, modernizing and upgrading existing infrastructure, and providing necessary equipment and facilities for exporters.

• Project Funding: Financial assistance for a total of 40 export infrastructure projects has been approved under TIES Scheme during FY 2019-20, 2020-21 2021-22 & 2022-23.

• The maximum amount of funding available for a single project under the TIES scheme is Rs. 20 crores. However, the actual amount of funding will depend on the nature of the project, its scope, and the extent of financial assistance required.

• Significance: The Department of Commerce has been working closely with State Governments and Union Territories to facilitate the growth of exports of goods and services from the country. 

• This involves helping them develop a comprehensive export strategy that leverages the strengths of each state through a thorough assessment process.

Objective of the TIES scheme

• The primary objective of the TIES scheme is to enhance export competitiveness by bridging the gaps in infrastructure, which could include areas such as transportation, storage, cold storage, quality testing and certification, trade-related infrastructure for trade promotion, and last-mile connectivity.

Eligiblity to apply for the TIES scheme

• Any central or state agency, including Export Promotion Councils (EPCs), Commodities Boards, SEZ authorities, and apex trade bodies, can apply for financial assistance under the TIES scheme. Private sector entities such as individual firms and companies are not eligible to apply.

Trade Infrastructure for Export Scheme (TIES) Project Funding

• The Trade Infrastructure for Export Scheme (TIES) scheme provides funding for various types of infrastructure projects such as:

• Border Haats: These are local markets that are set up on the border areas of India to promote trade between India and neighboring countries.

• Cold Chain infrastructure: This includes storage and transport infrastructure for perishable goods such as fruits, vegetables, and dairy products.

• Dry Ports: These are inland ports that are equipped with facilities for handling and storing cargo.

• Export Promotion Industrial Parks (EPIPs): These are industrial parks that are developed specifically for export-oriented units.

• Trade-related infrastructure for agricultural exports: This includes facilities such as pack-houses, ripening chambers, and irradiation facilities for agricultural products.

Challenges Related to Indian Export Growth

• Rising Protectionism and Deglobalisation: Countries around the globe are moving towards protectionist trade policies due to disrupted global political order (Russia-Ukraine War) and weaponization of supply chain, that is in way shrinking India’s export capacities.

• Lack of Basic Infrastructure: India’s manufacturing sector lacks sufficient manufacturing hubs, internet facilities and transportation are costly when compared to developed nations which is a huge deterrence to Industries.

• India uses only 4.3% of its GDP for infrastructure construction each year, as compared to China’s 20% of its GDP. For infrastructure, Rs 10 lakh crore (3.3% of GDP) was allocated in the budget 2023-24, an increase of three times from 2019.

• Uninterrupted power supply is another challenge.

• Lack of Innovation Due to Low Spending On R&D: Currently, India spends about 0.7% of GDP on research and development. This prevents the manufacturing sector from evolving, innovating and growing.

Key Suggestion

• Filling Up Infrastructural Gaps: A robust infrastructure network - warehouses, ports, testing labs, certification centres, etc. will help Indian exporters compete in the global market.

• It also needs to adopt modern trade practices that can be implemented through the digitisation of export processes. This will save both time and cost.

• Exploring Joint Development Programmes: Amidst a wave of deglobalisation and slowing growth, exports cannot be the sole engine of growth.

• India can also explore joint development programmes with other countries in sectors like space, semiconductor, solar energy to improve India’s medium-term growth prospects.

• Frontlining MSME Sector: Currently, MSMEs contribute to one-third of the country's GDP, account for 48% of exports making them key players in achieving ambitious export targets.

• It is important for India to link Special Economic Zones with the MSME sector and incentivize small businesses.

Conclusion

• The TIES scheme aims to promote export-led growth by improving the infrastructure that supports India’s export sector. It also aims to boost employment and economic development in the country by creating new job opportunities in the export sector.